Although you may not know the name Olam International (SGX:O32), you’re likely to have tasted the results of this agricultural giant’s work.
Not only is it one of the largest cocoa producers in the world, this top food commodity trader supplies some of the world’s biggest companies with nuts, spices, wheat, rice, coffee, cotton, sugar and dairy.
Olam’s history is just as varied and interesting, with its roots dating back to 1860, in the province of Sindh, India (now part of Pakistan). Two brothers named Jhamatmal and Thakurdas Chanrai set up a small, textile-trading operation, which flourished and soon expanded to include handicrafts and agricultural commodities.
By the 1870s, the company had spread its wings and opened a shop in Malta, and by 1900, had established operations to Sierra Leone, Ghana and Nigeria. From here the company rapidly expanded to South America while keeping its roots firmly based in Bombay (Mumbai).
By 1924, the company had set up branches in Japan and had set its sights on our very own island, taking over a Singaporean silk business. Operations were soon started up in Hong Kong, Shanghai and Canton (Guangzhou).
Kewalram Chanrai Group
After the war the family decided to separate the company into two. Kewalram Ghanshamdas Chanrai and his sons consolidated the existing businesses in India, Africa and the Far East and formed the Kewalram Chanrai Group (KCG). The company ventured into extension farming, setting up Afcott, which farmed and produced cotton.
It wasn’t until 1989, when KCG decided to set up a non-oil agri-commodities group in Nigeria. Seed capital of US$10,000 was given to one of KCG’s senior (non-family) members with a mandate to get things going. The company was named Olam Nigeria Plc and it concentrated solely on the export of raw cashew nuts from Nigeria to India.
The new company proved successful and soon cotton, cocoa and shea nuts were added to its export portfolio, expanding operations firstly within West Africa, and then to Tanzania and India. Olam’s headquarters were moved to London, operating under the name Chanrai International Ltd and the company’s employees grew to 500.
Sugar and sesame were added to the mix and Olam’s first South East Asian operations were set up in Indonesia. In 1996, Olam relocated its entire operations from London to Singapore. The Singapore government awarded Olam its Approved International Trader status and the company continued to grow, expanding both its operations and export portfolio.
Singapore Stock Exchange
In 2005, Olam International Limited was listed on the Singapore Stock Exchange and the company continued to expand to Vietnam, France and Thailand.
But did you know…
- The word ‘Olam’ means transcending boundaries, which it believes fittingly describes its journey from start-up to global leader over that past 25 years.
- Olam’s largest investor is Singapore’s state-owned Temasek Holdings Pte.
- Olam is the world’s largest trader of cashew nuts and the second largest global supplier of rice, coffee and cotton.
- Olam CEO Sunny Verghese is Singapore’s 40th richest man, with a net worth of a whopping $210m
- Olam is also the world’s number one global trader and exporter of cocoa. Indeed, the company reckons one in every eight chocolate bars consumed worldwide was produced from beans handled by Olam International.
Today, Olam International is a global leading agri-business operating in 65 countries with 23,000 employees from 65 different nationalities, and supplies many of the foodstuffs we consume every day.
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The information provided is for general information purposes only and is not intended to be personalised investment or financial advice. Motley Fool Singapore contributor Alison Hunt doesn’t own shares in any companies mentioned.