- POSTED: 18 Aug 2014 18:25
- UPDATED: 19 Aug 2014 18:35
The two firms want to grow their presence in Sub-Saharan Africa, where the food and beverage sector is expected to benefit from rising population and income levels, said Olam.
SINGAPORE: Olam International, the Singapore-listed agri-busines, will sell a 25 per cent stake in its packaged foods business to Japan's Sanyo Foods as the two firms seek to grow their presence in Sub-Saharan Africa.
Sanyo Foods is Japan's third largest instant noodles maker. It will pay Olam US$187.5 million (S$233.3 million) for the 25 per cent stake, and the amount could rise to US$212.5 million (S$264.5 million) should the packaged foods business achieve specific performance milestones in financial year 2015, Olam said in a statement on Monday (Aug 18).
Sanyo Foods currently has a 25.5 per cent stake in an instant noodles joint venture with Olam. With the latest investment, the Japanese firm's tie up with Olam will expand into the entire range of packaged food categories, Sanyo Foods President Junichiro Ida said in a statement.
Olam's packaged foods business currently participates in nine business categories: tomato paste, seasonings, biscuits, candies, juices, dairy beverages, milk powder, coffee mixes and instant noodles. The business focuses on serving consumers in Nigeria, Ghana, Mali, Burkina Faso, Benin,Togo and South Africa, and achieved sales turnover of US$350 million in FY2013.
Olam said the food and beverage sector in Sub-Saharan Africa benefits from a growing population, rising income levels, rapid urbanisation and aspirational consumers. The industry is at a relatively early stage of development with significant upside as income rises in key markets in this region, it said.