January 13, 2015
Olam International has exited the wool sector with the sale of Western Wool Marketing to Quality Wool for an undisclosed amount. The shift out of the industry comes as prices continue to fall, allowing Olam to focus on opportunities for growth in other divisions. Olam is one of Australia’s largest cotton processors, and the company is indicating it will expand its cotton business as well as its dairy business, and its grain business through a joint venture with Japan’s Mitsubishi Corporation. The purchase by Quality Wool, which will prove to be a beneficial strategic fit, as the two companies operate in different geographical areas of the country, will be financed through existing debt facilities. The majority of the wool processed through Quality Wool is exported to China, and the acquisition will increase the company’s broking throughput by 40% and bring its handling capacity up to a value of $165 million in wool bales per year.
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