Olam plans to list food ingredients unit by first half of 2022

SINGAPORE: Singaporean commodity trader Olam International, which is dividing its portfolio of diverse products into two new operating businesses, said on Friday (Feb 26) that it plans to list its food ingredients segment by the first half of next year.

The carve-out and separation of Olam Food Ingredients (OFI), which includes its cocoa, coffee and edible nuts businesses, and Olam Global Agri (OGA), which includes grains and animal feed, edible oils, rice and cotton, is estimated to be completed by the end of 2021.

The company will decide on the venue for the listing of the food ingredients business by June or July, CEO Sunny Verghese said, adding that the IPO would be of "substantial size and quite significant in any exchange" in which it would be listed.

The company is pursuing similar strategic options for OGA as part of a plan flagged in January last year.

READ: Olam divides businesses into two units, eyes listings

Olam, majority-owned by Singapore state investor Temasek, is one of the biggest traders of agricultrual commodities. It operates across 60 countries, including having a a small presence in Myanmar, where a Feb 1 military coup has triggered weeks of protests and strikes.

Over the next three to four months, Olam will evaluate its long-term plans and investments for Myanmar, where it has a wood processing and rice business, Verghese said. In 2019, the company had announced plans to exit the wood business globally.

A 2019 United Nations report stated that Olam had purchased and exported rice for the military-owned conglomerate Myanmar Economic Corporation (MEC). Verghese, however, said the company has not bought anything from the military in the last three years.

Olam reported on Friday that its profit after tax and minority interests (PATMI) for the 2020 full year fell 22.3 per cent to S$245.7 million due to an impairment charge. 

Operational PATMI, which excludes exceptional items, surged 36 per cent to S$677.8 million.