Tuesday, October 30, 2012

Olam Int’l

Olam Int’l: Olam aims to reach its target of 100% sustainable palm oil production in Gabon in 4 years, joining a long list of growers that are producing environment-friendly CPO. The agri-commodities trader expects a Roundtable of Sustainable Palm Oil certification audit to start once its mills commence operations. While, Olam's palm oil production is on a smaller scale than most Asian plantation firms, it sees huge potential in African markets as edible oil consumption per capita is only 10 kg vs 23 kg in Asia. In 2007, Olam secured a 100,000 ha JV plantation land in Gabon. Faced with limited suitable lands and rising land acquisition costs in SE Asia, top Asian palm oil companies such as Sime Darby, Golden Agri and Wilmar have signed deals in West Africa in recent years to expand production. Olam is also keen to explore oil palm cultivation in top producer Indonesia. The company is scheduled to release its 1QFY13 results on 14 Nov with street forecasting net profit to contract to $27.2m from $109.5m in 4QFY12 before rebounding to $148m in 2QFY13. Still, the market remains bullish on the stock with 70% buy ratings and consensus target price of $2.29.

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