Olam Brochure

The brand behind the brands

OLAM_cover_FA 01/16/05 4:49 PM Page 1

Contents

01I42 Fundamentals02I42 Heritage04I42 Worldwide08I42 Origination10I42 Processing12I42 Logistics & Shipping14I42 Marketing16I42 Distribution18I42 Cocoa20I42 Coffee22I42 Sheanuts23I42 Sesame24I42 Cashew26I42 Other Edible Nuts27I42 Beans 28I42 Spices30I42 Rice32I42 Sugar33I42 Dairy Products34I42 Cotton36I42 Wood Products38I42 Risk Management38I42 IT & Systems39I42 Sustainability40I42 People & Training42I42 Future

1The Brand Behind The Brands

Fundamentals

Olam is a leading global supply chain manager of agriculturalproducts and food ingredients.Our distinctive position isbased both on the strength of our origination capability andour strong position in the destination markets worldwide. We manage each activity in the supply chain from originationto processing, logistics, marketing and distribution. Ourcomplete integration allows us to add value and manage risk along the entire supply chain from the origins to ourcustomers.We are suppliers to many of the world’s mostprominent brands, and have a reputation as the ‘brandbehind the brands’.We are committed to providingemployment, supporting the community and protecting the environment in every country in which we operate.Across our worldwide network we seek to create value, atevery level, for our customers, shareholders and employeesalike.We will continue to pursue profitable growth because,at Olam, we believe creating value is our business.

olam_brochure_new_FA11.qx 01/16/05 4:44 PM Page 2

Founded in 1860, the KewalramChanrai Group is one of the oldestinternational companies in Africa andAsia with a long and successful traditionof being in business. Headquartered inSingapore, the Group is a multi businessconglomerate operating in over 45countries and employing over 12,000people worldwide.

In 2002, Russell AIF SingaporeInvestments Limited (managed by AIFCapital Limited) became the firstexternal investor to take an equity stakein the company. AIF Capital is one ofthe largest private equity investors inAsia, with over 100 years of combinedinvestment experience.

In 2003, Temasek Holdings, through its wholly owned subsidiary SeletarInvestments, acquired a stake in thecompany, encouraged by Olam's stronginternational perspective. TemasekHoldings is an Asia investmentcompany focusing on maximisingshareholder returns by being an activeinvestor and shareholder. Temasek'ssole shareholder is the Ministry ofFinance of Singapore.

Our third investor is the InternationalFinance Corporation (IFC). IFC's missionis to promote sustainable private sectorinvestment in developing countries,helping to reduce poverty and improvepeople's lives.

In addition to these world-classinvestors, the management team ofOlam has a significant shareholding in the company, which greatly alignsshareholder and management interestsin creating value.

(Opposite) Our corporate heaquarters in Singapore

(Above)Left & Middle:Our World class investorsRight: Idanre – the heart of cocoa growing industry in Nigeria


Our Heritage

Olam was established in 1989 by the Kewalram Chanrai Group, which has over 140years of business experience. In the past 15 years Olam has developed into a dynamicsupply chain manager based in Singapore and a world leader in many of its businesses.Our success has enabled us to attract world-class investors, namely, Russell AIFSingapore Investments Limited (managed by AIF Capital Limited), Temasek Holdings,through its wholly owned subsidiary, Seletar Investments Pte Ltd and InternationalFinance Corporation, adding both business and financial strength to the company.



(This Page) Olam is a company with broad horizonstrancending many boundaries

Worldwide

Olam has operations in over 35 countries, across 14 businesses and employs over3,000 people worldwide. We operate an integrated supply chain, sourcing frommultiple village level collection points in the origins and supplying to over 3,000customers in more than 50 destination markets.

With our proven ability to grow organically by exploiting adjacent opportunities,we have evolved from a single country, single product trader, to a multinational,multi-product integrated supply chain manager. We have leveraged our resources,including people, knowledge, systems and assets, to create competitive advantageand maximise our potential – consistently outperforming the expectations of our stakeholders.

The integration of these activities – origination, processing, logistics, marketingand distribution – forms a recurrent core in all of our businesses.

Our Businesses

Confectionery& BeverageIngredientsCocoaCoffeeSheanuts

Edible Nuts,Spices & BeansCashewOther Edible NutsBeans SesameSpices

Food Staples &Packaged FoodsRiceSugarDairy ProductsPackaged foods

Fibre & Wood ProductsCottonWood products


7The Olam Value Chain

Supply chain manager of agricultural raw materials and food ingredientsIntegrated across the value chain from farm gate to factory gate

Risk ManagementOlam acts across this range

Origin CustomerInland Logistics & Warehousing

PrimaryProcessing

Shipping & Marine Logistics

Warehousing Storage

Secondary Processing

Marketing DistributionSourcingOrigination

•• China

The OlamValue Chain

•• Indonesia

• Kazakhstan

•• Singapore

• Thailand

• United Arab Emirates

• Uzbekistan

•• Vietnam

• France

•• Italy

• The Netherlands•• Poland

• Russia

• United Kingdom

•• United States of America

• Papua New Guinea

•• South Africa

• Togo

•• Burkina Faso

•• Cameroon•• Cote D’Ivoire

• Congo

•• Gabon

•• Ghana

•• Guinea Bissau

•• Guinea

•• Madagascar

•• Nigeria

•• Tanzania

•• Uganda

• Zimbabwe

• Mozambique

•• Mali

•• Kenya

• Brazil

•• Benin

• Origin

• Benin• Brazil• Burkina Faso• Cameroon• China• Cote D'Ivoire• Democratic Republic of Congo• Gabon• Ghana• Guinea Bissau• Guinea• India• Indonesia• Italy• Kazakhstan• Kenya

• Madagascar• Mali• Mozambique• Nigeria• Papua New Guinea • Poland • Singapore• South Africa• Tanzania• Thailand• Togo• Turkmenistan• Uganda• United States of America• Uzbekistan• Vietnam • Zimbabwe

• Marketing Office

• Benin• Burkina Faso• Cameroon• China• Cote D'Ivoire• France• Gabon• Ghana• Guinea Bissau• Guinea• India• Indonesia• Italy• Kenya

• Madagascar• Mali• Nigeria• Russia• Singapore• South Africa• Tanzania• The Netherlands• Turkmenistan• Uganda• United Arab Emirates• United Kingdom• United States of America• Vietnam

•• Turkmenistan

•• India


Olam is one of the world’s leadingsourcing companies, with a uniqueprocurement reach. Our distinctiveadvantage is our origination capability.Our physical presence across a widenetwork of locations allows us to sourcethe products from as close to the farmgate as possible directly from the origin.To support this, we have developed anetwork of up-country procurementunits and warehouses.

Our trained and experienced fieldmanagers, with well-institutionalisedfield operating systems, enable accuratestock and quality assessment andeffective risk management. This ensureswe have complete control overprocurement, logistics and storage.

We are a multi-product company, which enables our country operations to cross-source products by sharingresources, thereby making each countryand business, cost competitive andlocally effective.

However, the reason behind ourextraordinary success in origination lies not simply in our physical presencein many origins and our innovativeapproach to business but in our belief in partnerships, enabled by the closeand productive relationships that wedevelop with growers and suppliers.

(Opposite) An Olam expert discusses the cotton crop with a grower in Central Asia

(Above)Left: We constantly assess crop yield and quality – a coffee farm in Cote d'IvoireRight: Quality of fresh produce is preservedthrough control of moisture – our drying yard in Brazil


Origination

Our experience starts at the origin. At the heart of ourbusiness is our origination activity, where our knowledgeand expertise assists farmers and collectors and provides us with a consistent supply of good quality produce. Webelieve in partnerships that are dedicated to long-termsuccess for Olam and our suppliers.


We process most of the products wesupply before they are delivered to thefinal customer. Our processing activitiesrange from processing and grading ofcoffee, pressing of cocoa beans, shellingand blanching of cashew and otheredible nuts, ginning of seed cotton tocotton lint, to sawing of timber logs into to sawn timber and milling andpolishing of rice.

Olam is one of the leading processorsof cashew nuts globally. We haveconsiderable investments in theestablished cashew processing centres,of India, Vietnam and Brazil. This hasplayed a pioneering role in transferringthe complex processing skills fromtraditional cashew processing centers,to raw cashew nut producing origins likeTanzania and Cote d’Ivoire with reliablequality and reduced costs.

All our cashew processing facilitiesadhere to the international qualitystandards (HACCP) demanded by our customers.

In cocoa processing, we enter intotolling agreements with processors,mainly at the origin, and provide boththe cocoa bean supply and marketingexpertise for the semi finished products.We also are able to supply a range ofhigh quality cocoa powder to ourbuyers.

As a leading coffee supplier, we haveinvested significantly in modernprocessing equipment and managefactories for the hulling, grading andcolour sorting of green coffee in theproducing origins. These coffeeprocessing capabilities enable us tocustomise our output to meet specificquality and grade-mix requirements ofthe coffee roasters.

Our qualified and experienced managersclosely monitor every stage of processingand packaging to maintain stringentquality standards. The ability to controland add value through our ownprocessing activities is pivotal tostrengthening our overall supply chainmanagement.

Olam’s processing activities, particularlyin the developing countries, has helpedto transfer technology, build localcapability, create local employment, and generate higher foreign exchangeearnings for all the economies.

(Opposite)Our cashew processing facility in Brazil

(Above)Left: We continually invest in appropriate new technologiesMiddle: Green coffee being processed in Cote d'IvoireRight: We maintain high standards of hygiene –our HACCP certified processing facility


Processing

Olam is engaged in processing and adding value to thevarious agricultural products that we handle. The primaryand intermediate processing of products in the originenhances Olam’s origination strengths. Adding valuethrough processing is fundamental to our strategy andenables us to provide the required quality for our customers on a consistent basis.


We place significant emphasis on ourability to organise every detail of thelogistics chain, beginning with theaggregation of numerous small parcelsinto suitably sized lots for shipment. Our investment in transportationinfrastructure, combined with contractualagreements with numerous haulagecompanies, enables us to move ourproducts quickly and efficiently from up country to the port. The effectivemanagement and co-ordination ofshipments is integral to our success,with our in-house shipping functionproviding the company with additionaladvantages. The strength of ourfreighting and forwarding capabilityprovides us with a competitive platformfor our business and ensures reliableand timely delivery to our customers.

Olam is always ready to offer innovativesolutions to logistical challenges. We areone of few companies to have movedcocoa in megabulk from Africa andAsia. Efficient logistics management isenabled by our wide geographicalspread and the extensive infrastructureof warehouses and transportationsystems we use. With our network, we have a global reach, but at the sametime, we provide a local response to ourcustomers and ensure a customisedand efficient service. Everyday, throughoutour worldwide operations, goods arebeing moved to our warehouses,shipped, discharged and delivered toour customers.

The in-house management of ourshipping operation also enables us toreduce costs, improve efficiency andmaintain the quality of products. We are able to impact the rate of loadingand discharge in the case of vessels on time charters, where there aresignificant benefits to be gained fromcompressing the turnaround time. As aresult, customers receive reliable, timelyand competitive supplies at their chosen destination.

(Opposite) Our managers oversee all aspects of the shipping and discharging process

(Above)Left: Our extensive network of warehouses helpus maximise supply chain efficienciesMiddle: Cartons of cashew kernels being stuffed in containers for exportRight: Inland transportation of Olam's logs in Cameroon waterways

Olam’s infrastructure in the origins facilitates the efficientexport and import of our products. We have the ability tomanage the multi-modal transportation requirements of ourbusinesses. This ensures we remain competitive and flexibleto meet our client’s requirements, no matter how complexthey are.

Logistics & Shipping



Customers expect a reliable supply and efficient service. We achieve this by getting to know our businesspartners and determining their specificneeds. We are dedicated to buildingunique relationships with customers thatreflect their individual requirements byproviding them with customisedsolutions, including special grades andquality, traceability, providing organicallycertified supplies or fair trade producecertified supplies and tailor made riskmanagement solutions. An example ofthis is in the marketing of timber wherewe offer a basket of origins and speciesto customers. The offer quantity of eachof the species within the basket can betailor-made to suit the user’s requirementwithout burdening the customer with aheavy inventory.

Our offices in Singapore, London & NewYork form the axis for all our hedgingactivity, with rapid access via our brokersto the London (LIFFE) and New York(NYBOT) futures exchanges and to our banks for covering our currencyexposure. These offices form the keyhubs for our marketing activities withexperienced traders who are in constantcontact with our customers worldwide.

To service the more specific customerrequirements marketing offices havebeen established in Poland, TheNetherlands, Russia, France, U.A.E,South Africa and China.

In addition to our own marketingexpertise and infrastructure, we have an extensive network of trusted andexperienced agents, with an in-depthunderstanding of the local markets,which is particularly important infragmented industries like cotton. Withour origination skills, we are able to offera level of service and information, whichdifferentiates us in the market place. We have strong relationships with our customers, including majormultinationals and support their supplychain requirements adding value andproviding a reliable source of rawmaterials and customised solutions and services to them.

(Opposite)Our traders are constantly in touch with markets around the world

(Above)Left: Olam's traders have instant access to the futures markets around the worldMiddle: Olam has strong presence in ourdestination markets – our Netherlands officeRight: Strong customer relationships are ofparamount importance to us


Marketing

Our extensive network and integration within the supply chain enables us toprovide our customers with timely, consistent and reliable supplies as well asup-to-date information on the world markets. This has helped us forge privilegedrelationships with the end users to whom we provide various value addedservices and customised solutions. Olam is committed to having the best peopleand technology to support our customers in effectively responding toopportunities and market developments.


As one of the world’s leading supplychain managers of agricultural productsand food ingredients, we deliverproducts of a consistent standard to ourcustomers in the destination markets.With expertise in shipping and logistics,we are able to manage the supply chainand provide cost effective delivery of ourproducts. We also provide value-addedservices such as Vendor ManagedInventory (VMI) services, which involvesthe outsourcing of inventory activities byour customers to us to reduce workingcapital requirements and improve just-in-time practices by tapping ourinventory management expertise. In order to understand our customers’requirements, we maintain regularcommunication with them, both pre and post-delivery, through our networkof offices and marketing agents/brokers.

Our distribution activities depend on the product, market and customers’requirements. For example, in the case of cotton, we are able to deliver directly to the large textile mills in Italy, Portugal,Brazil, China, Taiwan, South Korea andIndia. In the case of cashew kernels, we are able to deliver grade-wise doordelivery to roasters and salters acrossEurope and North America, while in thecase of rice, we distribute directly to smallwholesalers and retailers in numerousurban and rural locations across countriesin Asia and Africa. We distribute a portfolioof brands in rice across these markets,which include ‘Gangan’, a Thai parboiledrice and a high quality white rice, ‘MamaAfrica’, from Thailand. Through the samedistribution network, employing anenterprising sales force, we distributesugar and milk powder.

We have developed our packaged foodbusiness to cater for new products tosupply in our existing and new markets.We have begun to distribute our milkpowder brand, “Pearl” in various Africanmarkets and launched a 3-in-1 coffeemix in Russia.

The timely supply of products of aconsistently high standard ensures thatour customers can outsource theirinventory management to us, whilehaving complete confidence in ourability to deliver.

(Opposite)Delivery of cashew kernels to a customer from a warehouse in Rotterdam

(Above)Left: Our rice brands provide good value to our customers in AfricaMiddle: Delivering cocoa to a factory gate in NigeriaRight: Distribution of our branded rice

Olam provides timely and cost effective deliveries to customers throughout the world. Our supply chain infrastructure and our close relationships with other logistics companies enable us to meet the specific needs of our customerswhich vary in terms of location, time of delivery, volume, and packaging. What differentiates Olam is our willingness and ability to service each client’s unique requirements.

Distribution



Olam is one of the world’s leadingsuppliers of cocoa beans and cocoaproducts, which include cocoa butter,cocoa liquor and cocoa powder.

Olam has an extensive primaryprocurement network in each country;and is one of the world’s most diversifiedsourcing companies, operating asOutspan in various countries includingCote d’Ivoire.

We have a good understanding of thecountries in which we operate and anability to develop and maintain strongrelationships with the farmers, co-operatives and agents who supplycocoa. We engage quality controlinspectors who monitor cocoa at everystage, from source through to export.

In 1998, we became the first InternationalCompany to be granted approval by the Ghana Cocoa Board to operate as a Licensed Buying Company and havemaintained a leading position thereafter.We are leading exporters in Cote d’Ivoire,Nigeria, Indonesia and Cameroon andhave good market shares in countriesas diverse as Uganda, Tanzania andPapua New Guinea.

Olam has developed from its processingof cocoa products in Nigeria to sourcingproducts from many processors,particularly in Africa and Asia. Valueadded activities such as cocoa buttermelting and liquid delivery are beingundertaken and we have an ability toprovide high quality natural and alkalisedcocoa powder to our customers.

Olam’s trading team has a wealth ofexperience in both the physical andfutures markets and close relationshipswith leading cocoa processors andchocolate manufacturers worldwide.Olam’s marketing and tradingheadquarters moved from Singapore to London in 2003, to ensure greaterproximity to the origins and to furtherdevelop its customer base in Europe,Eastern Europe and North America.Olam continues to be a major supplierto most of the processing and chocolateindustries in the Asian region and has agrowing position in Japan and China.

(Opposite) Cocoa – 'the food of the Gods' – and a valuedcommodity in Africa

(Above)Far Left: A cocoa pod being inspected in IndonesiaLeft: Quality assessment in CameroonRight: Cocoa nibs are ground into cocoa liquorFar Right: Different types of cocoa powders forconfectionery, baking and beverages

19Confectionery and Beverage Ingredients

Cocoa

Olam is one of the world’s largestoriginators of cocoa, being physically present in most of themajor exporting countries in Africaand Asia. Headquartered in London,we have a strong marketing andtrading presence in all key marketsthrough our regional hubs inSingapore and New York. In allcountries we have built upon ourorigination strengths to ultimatelyprovide chocolate manufacturers and cocoa powder users with theirmost valuable ingredient.


Olam drew on a wealth of experience inorigination operations when the coffeebusiness was first established and todaywe are one of the major trade houses incoffee as well as one of the largestshippers of robusta coffee in the world.

Our procurement reach sets us apartfrom the competition. In almost everytown that is a coffee source, from Coted’Ivoire to Uganda in Africa and Vietnamto Indonesia in Asia, there is an Olambuying office or an Olam buying agent.Our presence on the ground gives usaccess to valuable market intelligencethat helps support our marketing and trading decisions and provides our trading partners with proprietaryorigin information.

Our investment in sophisticatedprocessing operations and qualitycontrol systems allows us to offerspecial grades tailored to customerspecifications. The regular channels of sourcing and control on processingenable us to offer a high consistency inquality. This, combined with our logisticsstrengths in the origin and destinationmarkets, including our ability to holdstocks close to our customers, allowsus to provide a high level of service toboth the large and small coffee roasters.

One of our key competencies – theability to assess the true values ofcoffee at origin – is based on our qualitysystems, our cupping facilities and ourtrained quality and cupping personnel.

We have leveraged our leadershipposition in the robusta market, ourunderstanding of quality and ourrelationships with the major coffeeroasters in the world to develop ourarabica business and thus provide acomprehensive range of coffees to our customers.

(Opposite) Our manager checking coffee cherries readiness for harvesting

(Above)Left: Grading of coffee in our factory in VietnamMiddle: Bagging of green coffee in Cote d'IvoireRight: Tasting of coffee at our inhouse cupping facility

21Confectionery and Beverage Ingredients

Coffee

Olam is one of the world’s largestshippers of robusta coffee withoperations in most major robustaproducing countries. The spread and reach of its procurementnetwork and its significantinvestments in processing in thesecountries distinguishes Olam from its competitors. This and itsunderstanding of quality allowsOlam to service the most discerningof customers. Olam is now expandingits presence in arabica origins toreplicate the pre-eminent position it has established in robustas


Olam is a key player in the Africansesame industry, managing an extensiveprimary procurement network. Ourprocurement operations start at the firstpoint of collection, where the sesameseeds are delivered by the farmer orsmall buying agents in lots weighing justa couple of kilograms. With our networkof buying units and agents, whichnumber over one hundred in the largeoperations, we are able to aggregatethe supplies into sizable quantities.Olam’s sesame business originated inWest Africa in 1995 and we made ourfirst shipments from Nigeria and BurkinaFaso to Japan in that year. Growththrough geographic expansion followed,as we set up procurement operations inthe East African origins of Tanzania,

Uganda and Mozambique. Significantinvestments in infrastructure includingwarehouses and cleaning machines,ensures that we manage the entirechain of operations from collection,storage and processing through topacking, transportation and shipping.This approach has allowed us to addvalue through the introduction ofeffective quality management systems,which assures our customers of a highquality sesame seed in their factories,improving their processing yields. Wehave recently integrated further alongthe value chain by investing in hullingfacilities and producing table gradehulled sesame seed.

The majority of sesame that we supplyis primarily used in the crushing industry,in which Japan is the largest importerand our principal market. We areexpanding our origin base to includeSudan, India and Myanmar with theobjective of adding to our portfolio thewhite and hulled sesame from India andSudan. This would leave us uniquelypositioned in terms of being physicallypresent in most major origins acrossAfrica and Asia.

(Above)Far Left: Quality controllers discussing the results of their analysisLeft: One of our sesame cleaning machines in operationRight: Sampling of sesame in our warehouse in NigeriaFar Right: An export ready bag

23Edible nuts, Spices and Beans

Sesame

Olam is a significant participant in the sesame trade out of Africa,managing an extensive procurementnetwork focused on sourcing directlyfrom the farmers and small collectors.Our effective quality managementand processing systems adds value to our customers by providing themwith a consistent quality of sesameseed. Olam, today has the largestorigin presence in the sesameindustry.

Olam operates in all of the majorsheanut producing countries and we arethe largest supplier of sheanuts in theworld. This is a natural business choicefor us as we capture the synergies ofthe sourcing infrastructure of othercrops located in or adjacent to thesavannah areas, including cashew,sesame and cotton. Our experience inthe procurement, drying and shipmentof sheanuts spans a decade, with ourfirst shipment of 3,000 tonnes toSweden in 1991. We are the onlysheanut supplier in the world to bephysically present in all the Sheagrowing origins in Africa with anestablished procurement networkreaching to the very first link in the chain- the collectors.

In Ghana, we have been awarded theGhana Export Promotion Council Awardfor Non Traditional Exports, inrecognition of our commitment to thegrowth and development of the sheanutindustry. To maintain our position wecontinually seek to improve the qualityprovided to our customers, withparticular attention being paid to criticalquality parameters, such as the oilcontent and the percentage of free fattyacids (FFA). We manage to keep theFFA as low as possible with our efficientdrying processes and good warehousemanagement practices.

We are probably the only sourcingcompany with laboratories andequipment in up-country locations withtrained personnel able to test the FFAlevel of sheanuts at the farmgate. Weare also able to add value byprocessing sheanuts into sheabutter,which is then further processed intoshea styrene and shea olien. The abilityto understand and manage the qualityof sheanuts is our competitiveadvantage, which is evidenced by thecapability to consistently deliver areliable product in large volumes to ourcustomers.

(Above)Left: Sheanuts grow on wild scattered treesMiddle: Sheanuts provide important revenue to the Savannah peopleRight: Turning of sheanuts controls thetemperature and FFA

Our heritage: Olam was established in1989 by the Kewalram ChanraiGroup, in Nigeria. From the beginningwe have benefited from the Group’s140 years of business experiencethroughout the world. This has been astrong foundation for Olam’s growthinto a dynamic multinational based inSingapore.

Sheanuts

Olam is one of the largest exportersof sheanuts in the world, withoperations in all the majorproducing countries. We have aprivileged relationship with manyof the villagers who in many casesrely upon our involvement to startthe collection of this crop grown inthe wild in the Savannah regions of West Africa. We place significantemphasis on the quality of theproduct and are developingprocessing initiatives at the origin.

Confectionery and Beverage Ingredients


Olam has a diversified sourcingoperation in all cashew growing areasacross 15 countries, including Brazil,India, Vietnam, Indonesia and variousorigins in West and East Africa. Thesuccess of this operation is built onOlam’s superior origination and logisticscapability, excellent relationships with thefarmers and other local suppliers, as wellas an in-depth understanding of the rawseed quality and value. Olam is probablythe world’s largest supplier of rawcashew nuts with around 25% marketshare of the current global trade flow.

The knowledge of cashew processingthat Olam has built over the years inestablished processing centres likeIndia, Brazil and Vietnam has beensuccessfully transferred to theproducing countries in Africa, likeTanzania, Cote d’Ivoire and Nigeria.

Olam operates large scale centralisedfactories, where the kernel output is graded according to stringentinternational standards. Most of ourfacilities are HACCP certified byinternationally renowned companies like SGS and BVQI. Olam’s factory inTanzania is also certified for supplyingorganic cashew, with traceabilityestablished back to over 1800 individual farms.

Apart from the capability to offer thecomplete spread of all cashew gradesfrom all origins, through its own factories- Olam also provides tailor madesolutions like guaranteed 100% foreignmaterial free kernels, container stuffingwithout using the traditional cardboardcartons, and packaging in bulk bags to its customers.

Through its marketing offices inSingapore, Rotterdam, New York,Moscow and Durban, all the majorcashew users have a timely access toOlam’s proprietary market informationand intelligence.

Olam’s vertical integration andgeographical spread, coupled with itsinnovative model of buying, processingand distributing kernels - has enabled it to build a unique competitive positionin the industry, making it probably thelargest Cashew supplier in the world today.

(Opposite)Olam's cashew processing facility in Brazil

(Above)Far Left: We operate one of the largest cashewprocessing facility in TanzaniaLeft: Quality control at roasting stageRight: Our state of the art filling center in VietnamFar Right: Cashew Kernels ready for export


Cashew

Olam is fully integrated along theentire supply-chain of cashewstarting from the farm gate in 15producing countries, through itsprocessing facilities in seven origins,right up to the end user’s factorygate across markets in USA, Europe,Asia and Africa. The procurement spread andprocessing infrastructure makes Olam a unique participant within thecashew industry and also underlinesits commitment to knitting sustainabilityand community development into itscore business operations.


Olam’s entry into the beans businesswas initiated through our originationpresence in East Africa, which had anexisting trade flow into the Middle Eastand Indian sub-continent. Starting fromthis niche trade flow, we quicklyexpanded our distribution presence inthe Indian sub-continent as well asexpanding into other consumingmarkets in South and North Africa.

We have leveraged our origin presencein China, Russia, South and NorthAmerica to expand the portfolio ofproduct and service offerings to ourcustomers. Apart from our directinfrastructure in various origins, we arealso engaged in sourcing the productfrom select suppliers in many countries,including Argentina, Brazil, Mexico,Canada, Turkey, Uzbekistan, China andEthiopia.

Although we still consider ourselves asa niche company in this industry, wesee tremendous opportunities forgrowth in the future. We are seeking toexpand our product portfolio as well asour origin and market spread in thecoming years.

(Above)Left: We offer a wide range of beans from around the worldRight: Olam provides customised grades through sorting processes


Beans

Olam is a niche player in the beansindustry, catering to requirements fordirect human consumption, as wellas the animal feed industry, in selectdestination markets. We leverage ourorigination strengths in key producingcountries to meet our customers’requirements across a range ofproducts including red and whitekidney beans, field peas, lentils, andchickpeas.

Olam has grown and leveraged itsexisting origin and market presence tobuild comprehensive strengths withinthe peanuts supply chain. We havedirect origination capability across mostexporting origins including China,Vietnam, India, East and West Africa,South Africa and Brazil. Our marketingoffices in Singapore, Indonesia,Moscow, Durban, Marseilles andRotterdam service a host of customersin most of the importing countries anddestination markets.

We offer the entire range of in-shell,blanched and kernel grades to meet theexacting standards of the snack andingredient industry.

While relatively a recent entrant in thealmond and hazel nut business, Olamseeks to provide its customers with acomprehensive package of productquality, delivery and other value addedservices, similar to those that it providesin cashews and peanuts.

We are looking to expand our productportfolio as well as the specific valuechain participation in various edible nutsby continually investing and upgradingour procurement, processing anddistribution infrastructure in key originsand consumption markets.

(Above)Far Left: Peanut plant growing in South AfricaLeft: We offer all three forms of peanuts – In Shell, Shelled and BlanchedRight: The nut industry provides livelihood for manyFar Right: Edible Nuts offer a healthy snack alternative


Other Edible Nuts

Migrating the cashew business into alarger edible nuts business was a natural adjacency for Olam.Leveraging on the strong and well-established relationships withcustomers in the food services,snack, bakery and confectionerysectors, we offer them a larger ediblenuts portfolio today, which includespeanuts, almonds, and hazel nuts.We are continually building andintegrating our supply value chain,to ensure that we meet stringentcustomer requirements in eachindividual product category.


With a captive procurement andprocessing infrastructure in Vietnam,Indonesia and Brazil, as well as a directorigination capability from India andChina, we believe, Olam is one of theleading industry participants in blackand white pepper. Our versatile plantsenable us to ‘tailor make’ the product toproduce all grades including ASTA,steam-washed, and sterilised pepper, to meet the needs of our discerningbuyers, including the retail and industrialspice and seasoning manufacturers aswell as the oleo resin industry.

Olam’s direct presence in all majorcloves origins (Indonesia, Madagascarand Zanzibar) as well as the main gingerproducing countries (Nigeria, China)gives us a unique procurement spread,unparalleled in the industry.

Olam’s offices in Indonesia, Vietnam andMiddle East also procure, process andsupply a host of other spices and spicecondiments like gambier, arecanut, long pepper, garlic, cassia, nutmegs,mace, cumin and turmeric.

With marketing offices and stockingpoints in Rotterdam, Marseilles, NewYork, Singapore, Moscow, Durban,Dubai and India – Olam is able to reachand service its customers across avariety of markets and also offercustomised delivery and paymentterms, to meet specific customerrequirements.

Olam plans to consolidate its position inthe spice industry by integrating alongits supply chain in selected spices,investing in specialised processing atorigin and further expansion of theproduct range to include other seedspices, herbs and dehydrates.

In addition, we will continually strive toenhance our value to our customers byproviding a bundle of services includingconsistency of product quality andcontractual performance, productcustomisation, enhanced food safetyand hygiene standards, traceability andfair trade practices, customised risksolutions, and reliable proprietarymarket intelligence.

(Opposite)We undertake crop study and forecasting at the farm level

(Above)Left: Our pepper processing facility in VietnamMiddle: Our range of spicesRight: First stage evaluation of quality at our warehouse


Spices

Olam’s direct presence in the keyproducing countries of pepper, led to our entry into the pepper business.Rapid and substantive investmentsin origination, processing anddistribution infrastructure have madeus one of the world’s leading suppliersof pepper, cloves and other spices intothe major consuming markets. Ourcurrent spices portfolio includes ahost of spice seeds and seasonings,herbs, dehydrates and other spicecondiments, which are distributedglobally through our widespreadnetwork of marketing offices.


Olam has a distinctive position withinthe global rice market as we participatein the complete value chain fromsourcing, shipping and logisticsmanagement through to branding,marketing and distribution.

Our physical presence, in all the majorimporting and exporting countries,provides us with an in-depthunderstanding of the dynamics of the local markets. This expertise hasallowed us to develop long-standingrelationships with producers andconsumers alike.

The majority of the rice trade occursbetween developing economies. Olamis one of the leading buyers of rice fromThailand, Vietnam, China, Myanmar and India. We import and distribute rice in Africa using the extensivenetwork of our sales force, distributorsand warehousing facilities that we haveestablished in most of the key marketsin this region. The growth in the demandfor our own registered brands,established over a number of years, is evidence of our ability to cater to the requirements of diverse markets.

Our over-riding concern for quality isevidenced by the importance we placeon quality control inspectors, who closelymonitor the quality and the packing atour suppliers’ mills and warehouses priorto export. The rice business relies uponthe company’s in house shippingexpertise to ensure that the supply line is uninterrupted and cost effective.

We have successfully integrated everyelement of the origination and distributionprocess enabling us to meet stringentdeadlines and effectively executecustomised supply contracts.

(Opposite)Loading of rice in Thailand

(Above)Far Left: Quality control prior to shipmentLeft: Bagging of our rice in ThailandRight: Rice loaded into one of the vessels on time charterFar Right: 'Mama Africa' is one of our leadingbrands of rice in West Africa

31Food Staples and Packaged Foods

Rice

Olam’s physical presence in themajor rice exporting countries and its distribution infrastructure in themajor African destination marketshas provided us with an unparalleledinsight into the market. With thecompany’s strong shipping andlogistics capability and a portfolio of well- established brands in manymarkets, Olam is one of the top threerice players in the world. On anygiven day, we have multiple cargoesof rice being loaded or discharged insome part of the world.


Olam’s sugar business began in 1995with the import of our first consignmentto Nigeria and Ghana. We currentlydistribute sugar in destinations wherewe have a multi-product presence.Multi-point storage ensures availability ofstocks in locations as close to ourcustomers as possible, providing themimmediate access. The sugar businessbenefits from the many synergies it haswith the rice business including sharedcustomers and costs.

The knowledge and understanding thatwas developed in West Africa wasleveraged into expanding the sugarbusiness into East Africa includingUganda and Madagascar, and intoCentral Asia. In South East Asia, ourbusiness has been focused onIndonesia following the liberalisation ofthe market. In addition, we have beenregularly supplying into Sri Lanka andBangladesh as well.

Olam’s sourcing and tradingheadquarters in Singapore acts as thecenter for all its physical and futureshedging activity with ready access toboth the London and New Yorkmarkets. Our offices in Brazil, Thailand,India, Poland and Netherlands providevaluable research information in relationto the sugar business.

(Above)Far Left: A sugar cane plantationLeft: Cane – a key source of sugarRight: Bags of sugar at our warehouse for distribution in AfricaFar Right: Refined white sugar – our principal product

33Food Staples and Packaged Foods

Sugar

Olam’s strength in sugar comes fromour ability to use our extensivenetwork in the key sugar markets inAfrica and Asia to distribute sugar,as well as from our strong sourcingrelationships with producers in theworld’s major sugar origins includingBrazil, Thailand and South Africa.Our long-standing and multi-productbusiness relationships with buyers atdestination gives us a superior costposition and a strong base of loyalcustomers.

The dairy business comprises largely of powders, cheese and fat productssuch as butter and butter oil. Olam’sparticipation is principally focused in the powders category.

Commonality of customers anddistribution channels provided us thefoundations for initiating and developingthis business. The dairy productsbusiness leveraged the existing networkfor other commodities imported byOlam into Africa and Asia to quicklyestablish a significant market presence.

Olam’s dairy business began in 2003with the import of our first consignmentof milk powder into Algeria. We rapidlyexpanded into other adjacent marketsand are today supplying dairy productsto all the major African countries, Asiaand the Middle East to discerningindustrial end users, repackers and distributors.

With export operations in Poland,Netherlands and sourcing networks in East Europe, South America andOceania, Olam is able to offer customersa wide range of choices from high-endapplications to the commodity gradedairy products.

Besides catering to the industrial andrepackaging segment in bulk packs weare also directly marketing consumerpacks, with ‘Pearl’ being one of ourleading brands, in several markets inAfrica. These consumer packs areavailable as tins, sachets and bag inboxes in various sizes.

With participation across all segments inthe destination markets and a presencein most of the producing countries, thedairy products business has good growthprospects within the Olam portfolio.

(Above)Far Left: Meticulous quality control of milk before purchaseLeft: Bagging of milk powder before exportRight: Our dairy business is built on our strength in our origin and destination marketsFar Right: 'Pearl' is our flagship milk powder brand


DairyProducts

Olam’s recent entry into the dairybusiness has been extremelysuccessful, enabling it to attainsignificant market shares in many of the major importing countries in Africa. Olam has establishedexporting operations in Europe andsourcing networks in all the majordairy producing countries.Withincreasing participation in the Asianand the Middle East markets andthe launch of consumer packs inAfrica, the dairy business is poisedfor rapid growth.


With a rich heritage in the textileindustry it is natural that cotton was one of the first businesses that Olamestablished. We believe that to haveeffective control on the cotton supplychain it is imperative to have a physicalpresence in the origin, strong qualityfocus, superior logistics and riskmanagement skills.

We have a strong presence in the globalcotton supply chain with focus onCentral Asia, West Africa, East Africa,Brazil and US. We ensure the availabilityof cotton for a variety of grades includingspecialised grades like Extra LongStaple (ELS) cotton throughout the year.

Olam’s key strategy is to add value byour involvement in the complete supplychain, from procurement of seed cotton,converting this to lint and delivering it to

the spinner. In addition, Olam acts as aone-stop shop to provide agriculturalinputs such as fertilizers, pesticides andalso ginning inputs to farmers in theproducing countries to secure cottonvolumes at the farm gate level.

With marketing operations in Europeand Singapore, we are strategicallyplaced to serve customers in Asia andbeyond, at any time of the day. Ourmarketing activities are focused inEurope, the Far East, China and SouthAsia, where we also operate through anetwork of trusted and experiencedagents. Professionals with experience inphysical cotton, risk management andthe futures markets manage the tradingof cotton, in Singapore

We have developed innovative financialand risk management solutions to helpmanage inventory cost and protectmargins in volatile environment for ourcustomers. Providing such customisedsolutions helps us develop preferredaccess to these customers.

Olam values integrity in our dealings as a core value in the cotton business,which is a key to the development oflong term sustainable relationships withour key partners including farmers,ginners and spinners.

(Opposite)Inspection of cotton before export

(Above)Left: A Cotton flowerMiddle: Seed cotton awaiting ginningRight: Ghanian Kente cloth

35Fibre and Wood Products

Cotton

Olam has a global sourcing networkcovering 90% of world trade in cotton.We have the capability to offer adiverse range of qualities from over30 key origins. We are focused onquality control and by integrating allelements of the value chain we aimto provide the best spinning value to our customers. We provide aneffective global supply chain bridgebetween the cotton farmers in theproducing countries and the spinners worldwide.


Olam’s first timber business was in thesourcing and shipping of Ghana teak toIndia. Our ability to transfer knowledgeacross origins, species and markets hasenabled us to diversify from teak tonon-coniferous tropical hardwoods. We chose to operate in the tropicalsawing logs segment due to our strongpresence in the producing countries,understanding of the African contextand expertise in origin supply chainmanagement.

Today we operate in most of the tropicalhardwood producing countries namely,Gabon, Congo DRC, Nigeria, Coted’Ivoire, Brazil, Ghana andMozambique. We harvest teak inGovernment allotted parcels (Coted’Ivoire) and buy lumber from small andmedium forestry enterprises (Ghana).Our hardwood logs are from small and

medium local suppliers who deliver thelogs at log parks in port city locations.We have recently commenced sawntimber sourcing from Brazil.

The major focus areas in the origins arerisk, quality and logistics management.The control over quality is reflected inour effective management systemsstarting with the physical log selectionand measurement undertaken bytrained graders at the log park. The finalproduct, either in log or lumber form, isthen screened for export, with its qualityspecifications detailed, marked andsegregated lot-wise for shipment.

There is also a continuing effort tointegrate along the value chain as inorigin processing or increased primarylevel of aggregation. We currentlyprocess hardwood logs and rough sawnlumber in Nigeria and Brazil.

The diverse geographic spread helps usto offer a choice of origins and speciesto our customers that meet theirindividual needs. We use our wide originspread and familiarity with multiplemarkets to suggest alternate species,which may offer better value to ourcustomers. Our objective is to enhancevalue through providing superior serviceto our customers whilst contributing tothe economies and people who benefitfrom socially responsible forestry.

Olam considers preservation of forestsas a part of its social responsibility thataligns with its long-term businessobjective to deal in wood products thatcome from sustainable and well-managed forests.

(Opposite)Our log park manager directs operations in the Cote d'Ivoire

(Above)Left: Truck and Rail transportation of timber in CameroonMiddle: Large loader moves an Olam logRight: Sawn timber ready for export

37Fibre and Wood Products

Wood Products

Olam is one of the largest suppliersof teak from Africa adding value witha vertically integrated operationincluding log selection, processing,shipping and redistribution. Teak is araw material that is environmentallyfriendly and can be harvested andreplanted in managed forest areas.Our ability to transfer knowledgeacross origins, species and marketshas enabled us to grow rapidly withspecialisation in the tropical logs and lumber market.


As supply chain managers of agriculturalproducts, our sustainability initiatives areinter-woven into our business model. Weidentify opportunities to create societalvalue in the communities within which we operate and use our expertise andresources for making a meaningfulimpact. The relevance of the contextand the domain expertise makes usmore effective, while the reciprocal valuefor Olam and the community helpssustain these initiatives over time.

In line with this philosophy, we have builtlong term stakes with our suppliers,comprising of smallholder farmers, villagelevel buying agents and cooperatives.We provide direct farm inputs, micro-financing schemes for farmers, seedcapital for local buying agents, advise to improve farming practice and post-harvest care, fair and transparent pricingand regular market updates.

We undertake local capacity buildinginitiatives, which create significant longer-term social and economic impact. Forinstance, our cashew factory at Mtwara,Tanzania, enables technology transfer,earns more foreign exchange throughvalue addition, provides skill developmentand training for local workers and createsemployment opportunities for about2000 women, who were otherwiseunemployed.

We are committed to protecting andnurturing the environment around us.Olam has undertaken various initiatives inthis regard, which includes our efforts topromote sustainable forestry managementpractices amongst small and mediumforesters in West Africa.

Agricultural subsidies, protective tariffsand non tariff barriers have significantlyreduced profitable market access tosome of the poorer nations, whootherwise have a natural advantage inproducing various agricultural products.We are actively involved in advocacy toachieve more open and competitiveglobal markets that honor the legitimatecomparative advantages of theproducing countries that we operate in.

We are excited about the tremendousopportunities ahead for Olam, to createsocietal and economic value, advanceresponsible corporate citizenship andcontribute to a more sustainable andinclusive global economy.

(This Page)Left: Educating farmers to improve the quality of their farm produce in BrazilMiddle: We touch and enhance the lives of many in AfricaRight: Meeting with village level collectors in Tanzania


Sustainability

At Olam, Sustainability is not a distinct and separateactivity – it’s the way we conduct our business.Sustainability initiatives are aimed at making ameaningful social impact in the communities within which we operate. We continually challenge ourselves to create a more inspirational and compelling business case for sustainable development, based on creatingshareholder and societal value concurrently.

Risk Management

Capturing and measuring risk is one of the fundamental capabilities of ourbusiness. Robust risk control systemsare an integral part of Olam’s businessand help us ensure our operationsmaintain their track record ofprofitable growth.

IT & Systems

(This Page)Left: A Risk Management meeting in progressMiddle: Currency and financial markets areclosely monitoredRight Bottom: Our Enterprise wide system (e-SIP)won the Computer World Honors Award in 2003

We believe that Risk Management is apart of the larger process of financialoptimisation. This is the process bywhich we try and ensure that the riskexposures emanating from the conductof our business do not lead to financialdistress and that shareholders obtain afair return on the equity or risk capital inwhich they have invested.

The soul of our risk culture is respect for“risk” and “capital”. We seek to identify,assess, measure and control risk

exposure in each of our businesses andfor the company as a whole through anumber of market, credit and counterparty, operational and statutory riskreporting policies, systems andprocedures. To quantify the level of risk,we use a Value at Risk (VAR) model. It is the alignment between the riskmanagement framework, capitalallocation process and performanceevaluation and aligned compensation,that influences behavior across ourorganisation.

With our diverse spread and complexity,Information Technology (IT) is a criticalelement that helps us reduce thecomplexity of managing a supply chainof 14 products from over 35 countries,many of which are challengingenvironments to operate in. We havebuilt proprietary and innovative ITsystems to enable us to exerciseeffective control on a real time basis,across the spread of our operations.

The enormous geographic spread andcomplexity of our operations, combinedwith less than adequate IT infrastructureand support in most of our remotelocations, pose a unique systemschallenge. To overcome this we havedeveloped an Internet based enterprisewide system (e-SIP), which innovatively adapts amobile computing technology, to linkremote upcountry locations, acrossseveral countries, to a central serverlocated in Singapore.

This has helped the business units to get real time access to critical data onprocurement, sales, risk, processing andlogistics. The e-SIP project was recognisedas a unique case study and won theComputer World Honours Award in 2003.

We have a comprehensive and integratedIT platform which combines all ouroperational systems like orderadministration, logistics and riskmanagement, with our financial andaccounting systems.


At Olam, we have consistently attractedhigh quality professionals to work in thechallenging emerging market conditionsin which we operate. Our managementteam consists of a combination of Olamdeveloped managers and externalrecruits who combine to provide thenecessary expertise for our business.We have a structured and formalisedtraining programme and a careerdevelopment plan designed to provideour managers with the opportunity tomanage a mix of businesses andlocations. This not only provides themwith broad knowledge and experience,but also enhances our ability to operateas a globally integrated organisation.Most of our core management teamhave had extensive field experience andare therefore aware of the issues thatmay arise from operating in developing

countries. These shared experiences helpto foster intra-business communication,disciplined operational management, andan entrepreneurial spirit.

Our greatest strength, as a companyhas come from creating an environmentthat has helped secure the highestpossible discretionary effort from ourmanagers and staff. This has enabledus to attract good quality talent to liveand work in difficult, emerging marketconditions and developed our capacityto build ‘global’ managers by requiringthat everybody go through a similar ‘riteof passage’, including living andworking overseas. Our policy ofpromoting from within, and a policy toalign owners and managers’ interestsby giving them meaningful ownershipstakes in the business has been animportant part of our manager’s acting

as owners. Each time a new business isstarted, or a new location is opened, weare able to deploy a core team of seniormanagers who are tried, tested, andproven, and who understand ourbusiness model, our culture and risksystems and who will serve as rolemodels in the new operation. Thismethod has proved extremely valuablein reducing the execution risk of thevarious growth initiatives that have beensuccessfully launched over the years.

Our organisational advantage, deliveredthrough the skills, knowledge andcommitment of our people, will continueto be the key driver of our success inthe future.

(Opposite)An Internal training session in Singapore

(Above)Left: Our people are at the heart of ourorganisational advantageMiddle: Our people take pride in their workRight: We provide a structured programme to induct and integrate all new employees

41The Olam Value ChainPeople & Training

At Olam, we recognise that our people are at the heart of our success and are our most effective and sustainablecompetitive advantage. We are totally dedicated to investingin the growth and development of our people to maximizetheir potential. Our people constantly improve their skillsthrough both in-house and external training.


Des

igne

d an

d pr

oduc

ed b

y D

IA B

rand

Con

sulta

ntsHead Office

Olam International Limited9 Temasek Boulevard #11-02 Suntec Tower TwoSingapore 038989

Telephone (65) 6339 4100Fascimile (65) 6339 9755Website www.olamonline.comContact us [email protected]

The Olam story, during the first 15 years of its existence, charts the rapid rise of a company into a global leader in many of its businesses, with a breadth ofknowledge and experience, we feel, is unparalleled in our industry. This has beenmade possible by keen business acumen and the many talents of our people. We have developed an innovative business model and have successfullyreplicated and scaled this growth model across our businesses and geographies.

We believe in discharging our responsibility towards shareholders, not only bygenerating strong and sustained financial results, but also by ensuring transparencyin information sharing and continuously upgrading the quality of our governanceprocesses. The trust and support of world class investors is a testament to ourproven track record, potential for sustained future growth and our continuedcommitment to uphold the highest standards in corporate ethics and governance.

We will continue to focus on securing growth by expanding into new origins andmarkets, expanding our product portfolio and enhancing margins through deepersupply chain integration – we are developing new ways of serving our customers,including offering value added services, which will capitalise on our strengthsalong the entire supply chain. We will continue to promote the Olam brand as a mark of excellence. These factors will ensure Olam prospers and that wecontinue to create value for our customers, shareholders and employees now and in the future.

Future


Olam Brochure

Business

fundamentals olam

heritage olam

temasek shareholder

years olam

aif finance of singapore

aif capital limited

singapore chanrai group

entire supply chain