January 12, 2023

By Lynda Kiernan-Stone, Global AgInvesting Media

Olam Group announced its plans to list its agribusiness subsidiary Olam Agri Holdings Pte. Ltd. (OAHPL) on the mainboard of the Singapore Exchange as early as H1 2023, and its intention to explore a concurrent listing on the Saudi Exchange, if market conditions are positive. 

Built over the course of 33 years, Olam Agri is a food and agribusiness leader focused on the trade and processing of grains, oilseeds, rice, and animal feed with a worldwide origination and merchandising footprint and processing capabilities that position the group to serve and capitalize on the climbing demand for food, feed, and fiber needed to achieve food security.

In March of this year, the Saudi Agricultural and Livestock Investment Company (SALIC), a wholly owned subsidiary of the Public Investment Fund of the Kingdom of Saudi Arabia, acquired a 34.5 percent stake in Olam Agri for $1.24 billion.  

This deal, which closed on December 23, 2022,  placed a value of $3.5 billion on Olam Agri, which has already had a record year generating volumes in excess of 40 million metric tons, revenues of $31.3 billion, and earnings before interest and tax of $752.9 million.

Following this transaction, the decision to list OAHPL was reached after a review to determine how to maximize Olam Group’s long-term shareholder value, also taking into consideration global agribusiness trends, rising food security concerns, and OAHPL’s performance.

Sunny Verghese, co-founder and CEO, Olam Group and CEO, Olam Agri, said, “Olam Agri has demonstrated a consistent performance track record with operating profit rising at a CAGR of 40.1 percent over the last three years, capitalizing on its position in emerging markets even amidst challenging macroeconomic conditions and rising geo-political uncertainty.”

“With the completion of the minority stake sale and strategic partnership with SALIC, Olam Agri is positioned to grow as a result of the demand for food, feed and fiber across end-consumption growth markets”

If the concurrent listing on the Saudi Exchange does happen, the Olam Agri IPO would be the first dual-listing for a single company on the Singapore/Saudi bourses, and the first ever on the Saudi Exchange for a non-Gulf Cooperation Council incorporated business.

“We are exploring a dual-listing in Singapore and Saudi Arabia – which would be the first of its kind – to tap into our strong Singapore and global shareholder base whilst welcoming investors in the Middle East, a region we intend to grow further,” said Verghese.

Repeat Strategy

It was back in January 2020 that Olam International and its subsidiaries announced a reorganization of its business to create two distinct operating groups: Olam Food Ingredients (OFI), and Olam Global Agri (OGA).

As an extension of this plan, Olam announced its intentions to seek a primary listing on the premium segment of the London Stock Exchange for OFI in H1 2022, with a goal of raising approximately $2.8 billion. The Singapore-based company also announced that OFI will then pursue a second listing on the Singapore exchange.

OFI works with some of the world’s best-known food and beverage brands, manufacturers, retailers, and food service outlets, establishing for itself market-leading positions across a range of on-trend natural, innovative, sustainable, and plant-based product lines.

It has operations in 48 countries across America, Africa, Europe, and Asia, sourcing directly and indirectly from about 2.6 million farmers. These supply lines incorporate a focus on sustainability and traceability into OFI’s unique, globally scaled business model that includes more than 100 manufacturing plants.

“Together with the planned OFI IPO, investors have an opportunity to diversify their portfolio while still participating in the unique investment prospects for Olam Agri and OFI individually,” said Verghese.

“The planned listings would allow Olam Agri and OFI to capitalize on the key trends in their respective sectors and strengthen their respective balance sheets, improve access to capital markets, broaden their shareholder base, and allow them to be better understood and valued as standalone entities with very different business propositions as they both continue to develop their differentiated leadership positions in the global markets.”  

~ Lynda Kiernan-Stone is editor in chief with GAI Media, and is managing editor and daily contributor for Global AgInvesting’s AgInvesting Weekly News and  Agtech Intel News, as well as HighQuest Group’s Unconventional Ag. She can be reached at lkiernan-stone@globalaginvesting.com.

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