Olam to suffer from Gabon fertilizer project delay

It'll have to wait until 2014.

According to CLSA, in its latest strategic review, Olam is now ushering in the dawn of a change in strategy where the focus will be on sustainable growth.

This will lead to reduced leverage ratios, lowered Capex, and more importantly, turn FCF positive by FY14 and into the future. The only fly in the ointment is that the Gabon fertilizer project will be delayed till CY14.

Here's more:

Nonetheless, these were key changes that we wanted to see Olam make, and having now steered the ship in the right direction, we shall await execution for affirmation.

Management indicates further delays in the Gabon fertilizer project, with financial closure to be achieved only in CY14. Mgmt also reiterate that Tata Chemicals remains obligated to commit to buying-in thereafter.

That said, Olam is looking for other investors to take a stake in the project and aims to reduce its own stake to <50% by FY16. Given the multiple project delays, we are concerned on Tata Chemicals will commit to the deal, and hence will look positively on any divestment of stake or new partner in the deal.

Reaching the people who run Asia's businesses is harder than it used to be.

Inboxes are crowded. Attention is short. The executives you most want to reach — the founders, CFOs, and operators who actually move budgets — are the hardest to find through the usual channels. If you're building a company, a category, or a reputation, you already know this.

We've spent twenty years building the room they read. Singapore Business Review is where senior decision makers in Singapore and across Southeast Asia come for business coverage they can't get elsewhere — in print, online, and in person at the summits and roundtables we host across seven markets.

If you have something these readers should know about — a point of view worth publishing, a product worth their attention, an event worth their time — we'd like to hear what you're trying to do.

Book a meeting

| Or download the media kit (PDF)

240,000 senior readers quarterly in print Top 1,700 Singapore companies reached

7 markets across Southeast Asia