Olam International, one of the world’s largest food traders, is hunting for more investments in Africa as it looks to benefit from the continent’s increasing appetite for everything from instant noodles to lollipops.
Long endowed with rich agricultural resources including coffee and cocoa, Africa has a growing middle class that is now demanding more packaged food, according to Chief Executive Officer Sunny Verghese. That’s presenting increased opportunities for investment in branded foods as well as raw materials such as rubber, cotton and lumber, outweighing threats from political unrest to terrorism, he said.
“The risks are slightly higher, but the rewards are better,” Verghese said in an interview March 8 in Kuala Lumpur. “It’s a good bet to make.”
One of Olam’s key bets in the continent is on branded food, driven by Verghese’s prediction that Africa’s working-age population will overtake China’s in 20 years.
Already established in 24 countries in sub-Saharan Africa, the agribusiness giant controlled by Singapore’s state investment company is looking to expand its market share across the continent. Olam’s sales from Africa climbed to $4.13 billion in 2014 from $1.7 billion in 2010. Its packaged food operations in Nigeria, Ghana and South Africa, now have sales of US$350 million to US$400 million ($483 million to $552 million) a year from nothing in 2005, when they were started.
The company wants to increase its integration along the production chain from seed to consumer, according to Verghese. For example, Olam plans to source the oil and flour in its Tasty Tom brand cooking oil and pasta from oil palm crops it grows and wheat mills it purchased.
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Long endowed with rich agricultural resources including coffee and cocoa, Africa has a growing middle class that is now demanding more packaged food, according to Chief Executive Officer Sunny Verghese. That’s presenting increased opportunities for investment in branded foods as well as raw materials such as rubber, cotton and lumber, outweighing threats from political unrest to terrorism, he said.
“The risks are slightly higher, but the rewards are better,” Verghese said in an interview March 8 in Kuala Lumpur. “It’s a good bet to make.”
One of Olam’s key bets in the continent is on branded food, driven by Verghese’s prediction that Africa’s working-age population will overtake China’s in 20 years.
Already established in 24 countries in sub-Saharan Africa, the agribusiness giant controlled by Singapore’s state investment company is looking to expand its market share across the continent. Olam’s sales from Africa climbed to $4.13 billion in 2014 from $1.7 billion in 2010. Its packaged food operations in Nigeria, Ghana and South Africa, now have sales of US$350 million to US$400 million ($483 million to $552 million) a year from nothing in 2005, when they were started.
The company wants to increase its integration along the production chain from seed to consumer, according to Verghese. For example, Olam plans to source the oil and flour in its Tasty Tom brand cooking oil and pasta from oil palm crops it grows and wheat mills it purchased.
Click Here To Register For Free Trial Services OR Give A Missed Call : +6531581402 Follow Us On Twitter : www.twitter.com/epicresearchsg Like Us On Facebook : www.facebook.com/EpicResearchSingapore Need Any Assistance Feel Free To Mail Us at : info@epicresearch.sg
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