Looking at the field of agriculture and the industries around it, Olam International stands out as the leading global integrated supply chain manager and processor of agricultural products and food ingredients. With a direct presence in more than 65 countries, and with sourcing and processing in most major markets, Olam has built up a global leadership position in many of its businesses. Currently, Olam is the only Singapore-headquartered firm to be named in the 2009, 2010 and 2012 Forbes Asia Fabulous 50, the brand’s annual list of the 50 most profitable firms in the region. The most current data provided by Bloomberg shows that Temasek, Singapore’s sovereign wealth fund, holds a majority (51.91%) of Olam.
Gagan Gupta, president of Olam International Ltd., is currently also Olam’s Country Head in the west African nation of Gabon. Gupta joined Olam in 2009 and was appointed chief executive of the Gabon Special Economic Zone (SEZ) in July of 2010. In his current role he is leading what the company refers to as the “transformational growth” of Olam in Gabon.
Settled in Gabon, Gupta has conceptualized the idea of Special Economic Zones and other public private partnerships (PPPs) with the government of Gabon. The current public private partnership between Olam and the government has been what industry watchers say is success story. As such, he consistently works to promote a working relationship between the company and the country. This Gupta says, is based on “mutual advantage and sustainable development.” To date, more than US$7 billion of new investment to Gabon has been drawn to Gabon under his watch.
From Gabon, Gupta spoke exclusively to Emerging Market Views about the agri giant’s position not only in Gabon, but on the sub-continent.
Emerging Market Views: What is Olam‘s market position in Gabon?
Gagan Gupta: Olam is a leading agri-business and infrastructure company, and one of the largest private sector employers in Gabon. Our agriculture and infrastructure projects are all developed in a socially and environmentally sustainable manner.
Why is the company investing so heavily in Gabon? What prompted the company to set up in Gabon and start the PPP’s?
Olam is actively investing across Africa, and Gabon is one of the many countries where we are investing. Olam has chosen to invest particularly in Gabon because of the synergy between Olam’s objectives and the government’s vision for an “Emerging Gabon.” This is in addition to political stability, its favorable agricultural and ecological conditions.
How is Olam working with the government of Gabon to attract investment in the country?
Olam and the government of Gabon has developed a vibrant Special Economic Zone (SEZ). The SEZ is multi-product, with a focus on wood. We currently have 13 companies in production and 21 under construction. The SEZ PPP to date has attracted over 80 companies to establish a presence in SEZ.
What new projects are in the works between the two and what is Olam’s role?
All Olam projects are a multi-year PPP between the state and Olam, including The GRAINE project, the new general purpose Port of Owendo, as well as the bulk & mineral port, oil palm and rubber plantations and the SEZ . Olam’s role is managing and running these PPP’s on day-to-day basis by ensuring social and environmental best practices, bringing the best agronomy expertise, training and building local capacity. This, we believe, will attract investors to the SEZ and create the necessary infrastructure in SEZ. Gabon provides the legal framework and ensures a smooth and fast approval system is in place. All projects will help diversify the economy away from oil; by attracting a greater range of overseas companies to invest in Gabon, or encouraging greater participation from rural communities in the formal economy.
How important is supply chain management in Gabon and within west Africa as a whole?
Logistics – and importantly – the cost of logistics is a key factor in development of West Africa. One challenge is the high charges at the port, which makes exporting less competitive and does not allow industry to develop. For example, our bulk and mineral port – we have built a multi-purpose, multi-user mineral port for use by small and medium sized miners. Prior to this, it was impossible for some of the mines to develop due to lack of infrastructure and inability to singularly invest in port infrastructure. As a result, two mine projects are able to export, as they are not required to invest in this infrastructure. On other side, it makes not only imports into Africa costly, but also increasing the cost of living and again making these countries less competitive. Expensive and poor logistics are a big strain on economic growth.
Supply chain management is key to ensuring Gabon achieves its potential as a gateway to central and west Africa. Our infrastructure projects, such as the Port of Owendo, will help develop this strategic and necessary advantage.
Photo Credit: Olam