Trader sees protein demand rising as consumer wealth expands
Olam may also expand coffee farming in East African nations
(Bloomberg) Olam International Ltd., one of the world’s largest food traders, is considering expanding into fish farming in Africa to tap demand from a growing and more affluent population.
The Singapore-based firm is conducting a feasibility study on farming fish in West Africa, likely in Nigeria, the continent’s most populated country, Chief Operating Officer Shekhar Anantharaman said. Olam could potentially start the venture with partner and shareholder Mitsubishi Corp., which owns fish businesses, he said.
“We believe that there’s opportunity for fish farming in Africa,” Anantharaman said in an interview in Abidjan, Ivory Coast’s commercial capital. “Today a lot of the fish is imported. We think there’s a lot of potential to grow it and make it far more easily available and at cheaper cost to the general population.”
Producing fish is part of Olam’s plans to target Africa’s growing middle class, and as wealth on the continent expands, consumers may add more protein to their diets. The company already operates a fish-feed factory in Nigeria and farms poultry and mills wheat in the country.
“There’s a strong growth pipeline for the next 20-30 years that we can see in Africa, as it has happened in Vietnam or Indonesia, or China,” Anantharaman said. “We think that as the African population grows and the economics improves, we could really shift to higher protein.”
Olam also plans to boost packaged-food output at its processing plants in Nigeria and Ghana, he said. While the firm is focused on those countries, it may consider opening a factory in Ivory Coast, he said.
Olam’s Business Breakdown
Breakdown of revenue for 2017
Source: Olam data on Bloomberg
The company, which operates in 25 African nations in commodities from cocoa to coffee to rice, wants to expand its farming business across the continent, Anantharaman said. That includes looking for coffee farms in East African countries including Ethiopia and Uganda. Olam also sees more opportunities for palm oil, and may expand rice output in Nigeria, and plans to increase capacity at its Ivory Coast cocoa factory by 10 percent, he said.
“Where we feel that corporate farming can work, we’re looking at investments in building large-scale corporate farms,” he said. “We have appetite for more in Africa.”
