SINGAPOREAN agribusiness Olam has had a relatively low profile in Australia up until now, known primarily for being one of the first businesses to get bulk wheat export accreditation following deregulation.
However, with a rebranding of Olam’s flagship Australian subsidiary, Queensland Cotton, to the Olam banner in the next 12 months, Olam Australia regional manager Richard Haire believes the Australian grains industry will become much more familiar with the business, which has substantial interests in grain, horticulture and wool in Australia.
Queensland Cotton, with origins dating back to 1921, was bought by Olam in 2007.
Within a year, QC had opened a grain trading operation to trade wheat, barley and canola – in Olam’s first foray into the global grain market – and quickly earned bulk wheat export accreditation.
Mr Haire said the company had also diversified into wool, taking over Western Wool in NSW and GrainCorp’s wool trading business.
By early 2010, Olam had bought out Timbercorp’s managed investment scheme almond orchards in Victoria and added it to the diversified business, making it the biggest almond grower in the country.
On the grain trading front, Mr Haire said having the backing of a multi-national player made it easier.
“In grain trading, capital is so important, so having the balance sheet of a big international business behind you is very important.”
Mr Haire said Olam was still primarily acquiring its grain in Australia through a brokerage network, however it was also offering prices at the silo in some circumstances, generally still under the Queensland Cotton banner for now.
“The bulk of our business is still wholesale, which is the traditional way Olam has done business, but we also have a significant footprint of direct dealings with farmers in the areas where people are familiar with our cotton brand in Queensland and northern NSW.”
Mr Haire said a lot of the grain was exported to traditional Australian markets in south-east Asia, but added Olam was also heavily involved in flour milling in sub-Saharan Africa.
“From the Australia point of view, we are looking at eastern African countries like Kenya, Tanzania and Mozambique, and we’d probably look to originate the grain from Western Australia, which has a freight advantage over the rest of the country.”
“There’s the conventional Australian wheat markets, but also some newer ones.”
He said Olam had ambitions to accumulate more than a million tonnes of grain, but said the majority would still be bought via the trade.
“We’ve been offering prices for a couple of years – it’s not a big part of our business, but it is something we are looking to develop.
“Olam doesn’t want to duplicate existing field networks, but where there is a gap, we will look at the opportunities.”
Mr Haire was confident Olam would quickly develop a reputation as a good company to do business with.
“A good reputation spreads as fast as a bad one – we hope once we start doing volumes direct with the farmers, people will spread the word.”
He said the decision to focus more on the Olam brand had been made due to the company’s international reputation.
“When they bought Queensland Cotton, they were happy to keep a low profile, and also the Queensland Cotton brand had significant goodwill, however, Olam is a big brand internationally and we are looking to leverage that more here in Australia in the next 12 months.”
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