Olam sells dairy processing plant in Cote d'Ivoire for $23m

To aid its ailing dairy products business.

A report by OSK-DMG reveals that Olam International has announced the sale of its dairy processing plant in Cote d’Ivoire to Royal FrieslandCampina (Friesland) for a cash consideration of USD18.7m (SGD23.4m).

In addition, Olam will assign its trademark “Pearl” for a cash consideration of USD6.3m (SGD7.9m), providing Friesland the right to use the trademark for sweet condensed and evaporated milk products in certain designated countries in Africa. Olam expects to book total cash inflow of USD25.0m (SGD31.2m) and aone-time pre-tax gain of about USD10.0m (SGD12.5m) upon completion of the transaction in 2QFY15.

OSK-DMG views the disposal as a positive step taken by Olam towards achieving its target cash flow release of SGD1bn from divestments and disposals. Including this deal to the earlier announced and completed deals takes the total cash flow release to SGD948.3m. In addition, the disposal also will help Olam improve the profitability of its Dairy Products business, which has been underperforming for some time now.