CEO cites changing consumer values and government policy for strategic shift by JUSTINA LEE, Nikkei SINGAPORE — Singapore-based commodity trader Olam International announced plans to sell off its rubber, sugar, wood products and fertilizer businesses as part of its 2019 to 2024 business plan meant to streamline its portfolio. The divestments, which will take place over the next six years, are expected to free up around $1.6 billion in cash for new investments. As part of the six year plan, the commodity trader said it will pump in $3.5 billion into 12 business segments, including edible oil, cocoa and spices. Sunny Verghese, Olam’s co-founder and CEO, said the company decided to pull out of the four businesses mainly because they do not offer long-term structural sustainability. Verghese said that to expand the rubber business, for example, Olam would have to buy more land. “In terms of regions and places where rubber can be grown, it might involve planting rubber in deforested land,” he added. Olam decided to exit the sugar business because it believes consumption will decline over the long term as more governments introduce sugar taxes. Such levies are already in place in number of countries, including India, Thailand, Britain and the Philippines. Malaysia, where it is… continue reading
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