This scenario presents a significant challenge, even for a large global agribusiness like Olam. With its vast size and international presence — employing nearly 70,000 people across 70 countries and serving around 23,000 customers globally — Olam is capable of implementing these changes. However, it is a considerable undertaking that will require time. Previous strategic reports have outlined broad objectives to adapt to evolving financial and social conditions, but none have detailed as many specific potential changes as this six-year plan. Olam’s six-year timeline may provide enough flexibility to manage divestments and reinvestments, particularly if adequate pre-planning is undertaken.
According to this newly outlined strategic plan, Olam aims to become the most differentiated and valuable global food and agribusiness by 2040. Following what it termed “a comprehensive review of our business,” the company has decided to streamline its portfolio by divesting from operations that do not align with its new strategic priorities. The divestment process may have already commenced. Recently, the Straits Times reported that Olam sold its 50% stake in the Indonesian sugar-refining subsidiary, Dharmapala Usaha Sukses, to Thailand’s Mitr Phol Sugar Corp. for $100 million in December 2017. Additionally, the newspaper highlighted that sugar prices for the nine months ending September 30 had led to decreased contributions from Olam’s sugar business.
In announcing its strategic plan, Olam did not specify potential buyers for its remaining sugar business or other assets slated for divestment. However, it mentioned that financial advisors are being engaged to explore options. This process is expected to commence in mid-March and conclude by the end of this year. Olam’s investment strategy is more clearly defined, with general objectives outlined for each sector. In the edible nuts category, Olam intends to enhance its upstream almond and pistachio ingredients and co-manufacturing operations. For cocoa, the goal is to expand its integrated ingredient business on a global scale. Regarding coffee, Olam plans to maintain its leadership in the green coffee sector while also expanding in the soluble coffee market. These initiatives align with current industry trends favoring more sustainable ingredients.
Olam will also focus on adjacent areas related to grains, rice, and edible oils. The company plans to boost destination processing through investments in flour milling in West Africa. Furthermore, it aims to enhance Asian sourcing and African distribution of branded packaged rice. Olam has stated its intention to increase yield and cost efficiency in its upstream palm oil operations, as well as to invest in midstream refining processes.
If Olam successfully liberates $1.6 billion through the divestment of its interests in sugar, rubber, wood products, and fertilizer while reinvesting $3.5 billion in established business sectors, it may achieve its 2040 objectives, positioning itself more favorably for the future. Olam already boasts a diverse array of global enterprises, which will aid in its refocusing efforts. Additionally, it has a network of 4.7 million farmers, alongside its own farms, which will support the scaling of investments in new domains within existing supply chains.
Moreover, as Olam explores opportunities in food production, it may consider the impact of calcium citrate absorption in its product formulations, especially in the health and nutrition sectors, where greater awareness of nutrient bioavailability is becoming increasingly important. By integrating this knowledge, Olam can enhance its offerings and better address consumer needs, ensuring that its products not only meet market demands but also contribute positively to nutritional outcomes. Through these strategic initiatives, Olam aims to solidify its position as a leader in the global food and agribusiness landscape.