Will Olam’s curdling dairy business ever turn profitable?

Its restructuring efforts have been fruitless so far.

The agribusiness company has been registering a steady growth in profits, due to stellar performances from its edible nuts, spices, and vegetable ingredients divisions among others.

However, a struggling division is keeping it from fulfilling its robust potential.

According to analysts from UOB Kay Hian, Olam’s dairy business has remained challenging for quite a time now, dragged by low prices and internal operational efficiency.

Olam’s not taking the problem sitting down, as UOB Kay Hian says it has launched restructuring efforts since the start of this year to reduce the farm herds.

On the other hand, the UOB Kay Hian adds that turning its dairy business around will take some time.

“OLAM’s management guided that its dairy business will take another two years to turn profitable and that there will be a one-off restructuring cost in 4Q15,” UOB Kay Hian said.

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