OLAM: Media reports cite that Co. is in advanced discussions to acquire privately held Indian spices Co, Vallabhdas Kanji, which has been running a process to bring a strategic investor. Olam has hit the acquisition trail hard since its commitment to double its FY2016 goal to US$1b Net Profit announced during their FY2011 results briefing last week.
Last week, Olam announced the acquisition of an India-based 3,500 tonnes crush per day (TCD) sugar milling facility and a 20MW cogeneration facility by way of Hemarus Industries, with plans to enhance the sugar milling capacity to 5,000 TCD. Separately, OLAM's subsidiary NZ Farming Systems Uruguay reported FY11 net loss US$1.59m vs US$ 11.29m loss yoy, revenue at US$43m, +91% yoy.
We note that Olam had previously no or significant exposure to India and the spice market and could represent a future avenue for further investments into the country and plant.
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