Olam International Ltd Has Been Named As 1 Of Top 50 Companies That “Change The World”

The September issue of Fortune Magazine caught my eye when I chanced upon it at a newsstand recently.

The issue highlighted Forutne’s own pick of the world’s top 50 for-profit organisations that are doing good for society. Fortune calls this the “Change The World” list.

This is part of a new trend of the “social enterprise”, where companies would include sustainable corporate social responsibility (CSR) initiatives as part of their business model.

Most of the highlighted companies are from the United States, but there is one notable entry from Singapore. It is non-other than Olam International Ltd (SGX: O32).

Fortune claims that Olam has been doing its part as a good global citizen by empowering small farmers. The company, through its Olam Livelihood Charter (OLC), has an objective to increase its investment in small farmers and source more products from them.

Since 2010, 345,000 small farmers have obtained OLC status. Olam also provides advice to these farmers on how they can improve their practices and crop yields.

With Olam being a supplier to some of the largest food companies in the world such as Nestle and Unilever, it could help give consumers better peace of mind knowing that they are helping to support small farmers throughout the world while buying food items.

I see this is as a positive for Olam and hopefully, more companies in Singapore would follow the company’s lead in adjusting their business models to provide positive social impact.

Doing so could also benefit shareholders in the long run. Although Olam clocked a loss in its last completed fiscal year, it has seen its operating income grow from S$502.8 million in the 12 months ending 30 June 2010 to S$941.2 million in the 12 months ending 30 June 2016.

Olam  currently has a 3.4% dividend yield and is trading at 1.4 times its tangible book value.

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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 writer Stanley Lim does not own shares in any companies mentioned.