42 ■ TRADER PROFILE
C&CI
Well known as a
March 2010
trader in a range of
Olam sets its sights
agricommodities, Olam
International has a
strategy of moving on more midstream
further into midstream
activities such as erma: Olam
value-added manufactur-
business
Vivek V
started life
as a family-owned
ing rather than just
business specialising
in cashew nuts but
supply chain
has expanded into
a multi-national
management of
company active
in a range of
bulk commodities
agricommodities
O
lam has been a supply chain with the company’s strategy of mov-
manager in the agricommodities ing further into midstream opera-
business for more than 20 years, tions, in order to provide greater
having started life as a family-owned busi- added value services to its clients.
ness exporting cashew nuts out of Nigeria.
The company’s core business remains
Moving into
origination, primary processing, logistics
and trading, but increasingly it is looking at
production
supply bulk spray-dried coffee powder,
secondary processing opportunities as it Once it has been full commissioned, the freeze-dried coffee granules and coffee
moves into more midstream activities, and new soluble facility will have an annual extracts in bulk to brand owners and pri-
at downstream activities such as contract capacity of 7,000-8,000 tonnes. "Olam as vate label packers who do not have their
manufacturing and private label coffee. a whole has a strategy of moving further own manufacturing facilities.
Still heavily involved in West Africa, into midstream business," Mr Verma told
Olam has evolved into a global organisa- C&CI. "This move into the soluble market
Big business in
tion that acts as a supply chain manager, in Vietnam is an example of that strategy in
managing risks for its clients in more than the coffee business," he explained, "and it
soluble market
a dozen products groups, including coffee follows a pattern that we have established Olam remains the world’s largest supplier
and cocoa, coffee being among its top in other parts of the business. We felt that of Robusta, with an approximately 15 per
five revenue earners. Vietnam was the right location, they are a cent global market share, primarily due to
large producer and it is the right part of the its strong presence in key producing coun-
Origins in West Africa
world, with a growing market for soluble tries such as Vietnam, Indonesia, India,
coffee." Côte d’Ivoire, Cameroon and Uganda,
As Vivek Verma, the company’s Managing Olam is investing around US$45 million where Olam has origination and primary
Director for its coffee business explained, in the new facility, which will produce and processing facilities.
Olam also started trading coffee out West Given its strength in origin countries and
Africa, subsequently expanding into Asia. significant market share in the Robusta
Until about five years ago, the bulk of its market that it has, the move into soluble
coffee business was Robusta, but more The company’s core business manufacturing is an obvious one given its
recently it has expanded rapidly in the
remains origination, primary
midstream strategy.
Arabica side of the market, and nowadays Speaking at the time that the plan to
is active in a number of the leading origin
processing, logistics and
build the plant was first announced, Mr
countries in Central and South America. trading, but increasingly it Verma said the move into soluble coffee
"Today more than 50 per cent of our vol-
is looking at secondary
manufacturing was also a move into a
umes are in Arabica coffees out of South
and Central America," Mr Verma told C&CI,
processing opportunities as it
higher value-added activity in the coffee
supply chain. "It is part of our overall
noting that Olam’s Arabica-based busi-
moves into more midstream
growth strategy for coffee to build produc-
ness has been expanding rapidly for the
activities, and at downstream
tion facilities in strategic locations that
past several years. With processing facili-
activities such as contract
have a price advantage - such as Vietnam
ties in most of the Central American and - so that we can cater to growing demand
other origins it does business in, Olam is
manufacturing and private
for soluble coffee in markets such as the
currently building a new soluble coffee label coffee Asia, Middle East, East and Central
plant in Vietnam, a move that is in keeping Europe."
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