Following successful progress against the Plan targets, in January 2020, we announced a re-organisation of Olam to unlock long-term value.
To read more about the two operating groups - ofi and Olam Global Agri and the role of Olam International as parent, steward and accelerator click below.
This trend refers to the growing consumption of food (or things) outside the home and on-the-go, omni-channel purchasing instead of purchasing in shops, the impact of mobile connectivity on consumer behaviours, and the food choices being made through social media recommendations.
Technology is changing how we do things through robotics, drones, unmanned vehicles, precision agriculture, automation, big data and analytics, and digital engagement. We have examples throughout our business where it helps manage resources, improve product quality, and customer interactions, from sensors on plants, to mapping farms, to IoT sensors in factories.
Consumers are favouring healthy, nutritional food and customised diets. They are seeking natural, organic and clean labels and to buy local where possible to reduce food miles. In developed nations, households are prioritising food spend while cutting back elsewhere, forcing suppliers to differentiate their offerings to reflect these consumer demands.
Consumers are seeking food that is friendly to the environment, ethically sourced and sustainably produced. There has been a growing interest in the footprint of all the food, food ingredients and feed ingredients that are supplied to customers and increasingly, consumers are seeking assurance and certification of the supply chain, visibility, provenance and traceability.
Planned investment of US$3.5 billion (including US$1 billion maintenance capital expenditure) in 12 prioritised high potential growth, proven businesses – nuts, cocoa, grains and animal feed, coffee, cotton, spices, edible oils, infrastructure and logistics, dairy, rice, packaged foods and commodity financial services.
Release of US$1.6 billion by de-prioritising and divesting four businesses – sugar, rubber, wood products, fertiliser – and other non-core businesses and assets that no longer align with our strategic priorities. The divestments will be completed in a responsible and orderly manner during this plan period.
Drive margin improvement by enhancing cost competitiveness and optimising capital efficiency and productivity.
Generate additional revenue streams by offering differentiated products/services such as AtSource, risk management solutions, value-added services, ingredients and product innovation; and from both existing and new channels such as co-manufacturing, the food service sector and e-commerce for small and medium-sized customers.
Explore partnerships and investments in new engines for growth by assessing opportunities to deliver to the consumers and farmers of tomorrow.
A minimum Return on Equity of 12 per cent from 2021 onwards.
Earnings Before Interest, Tax, Depreciation and Amortisation (EBITDA) to Invested Capital ratio of at least 13 per cent from 2021.
Positive Free Cash Flow to Equity from 2020 onwards.
Net Debt to Equity ratio not exceeding two times between 2019 and 2024.