All data are collected in the Fiscal Year of 2008-2009.

Uganda / Agriculture , Food, Beverages, Tobacco

Olam was established in 1989 by the Kewalram Chanrai Group (KC Group).Over the past 18 years, Olam has grown from a single country, single product business into a global supply chain manager headquartered in Singapore with market leadership positions in many of its businesses. The company operates in 56 countries from where it sources and supplies 14 agricultural products. Olam is listed on the main board of the Singapore Exchange and is a component stock of the benchmark Straits Times Index.

Founded in 1860, the Kewalram Chanrai Group is one of the oldest international companies in Africa and Asia. In 2002, Russell AIF Singapore Investments Limited (managed by AIF Capital Limited), based out of Hong Kong, became the first external investor to take an equity stake in the company. AIF Capital is one of the largest private equity investors in Asia, with over 100 years of combined investment experience. The company’s other investor is the International Finance Corporation (IFC), the private sector arm of the World Bank Group. I

Olam (Uganda) is a wholly owned subsidiary of Olam International.

7/9/ Mapera Rd, Nalukolongo, Kampala, Uganda; Tel: + 256 41 271440/271418

Olam (U) Ltd operates in Nebbi, Arua and Yumbe districts

Olam is engaged in processing and adding value to the various agricultural products that it handles. Olam Uganda is involved in the production and processing of Robusta coffee, rice, cotton, and sesame. Olam Uganda is currently developing its organic cotton and coffee businesses.

Olam is one of the leading cotton exporters from Tanzania, Uganda and Mozambique where it has its own / and lease ginning arrangements. In these countries Olam has an extensive seed cotton sourcing infrastructure and strong quality management systems from procurement of seed cotton to the final conversion of lint

71 employees in Uganda

Olam has a 13 percent market share in the coffee industry in Uganda and an approximate 33 percent in the cotton sector.

“Our governing objective is to maximise fundamental intrinsic shareholder value over time for our continuing shareholders. To achieve this, we focus on impacting three key value drivers:
1. opening up the capital spreads (ROE-Ke and ROIC-WACC),
2. increasing the rate of profitable growth, both organically and inorganically, and
3. extending our competitive advantage period to be able to sustain this growth over time”

Olam’s growth model is driven by a clear definition and focus on our core business and a systematic and repeatable formula for adjacency expansion based on that core. We have defined that core business as “supply chain managers of agricultural products and food ingredients”. This means that we provide an end-to-end supply chain solution between the farm gate in producing countries and the factory gate of our customers in destination markets.

Our ability to achieve above market growth rates is a function of our end-to-end supply chain business model, our differentiated competitive position, adjacency-based organic growth, disciplined inorganic growth, securing both the capital and people resources to support this growth, institutionalising scalable systems and having strong governance and transparency. The Olam model, the way we do business, has helped us achieve consistent business results over the last 19 years across commodity cycles and economic cycles. The Olam model is centered around these 10 building blocks:

The Uganda Coffee Development Authority (UCDA) is responsible for quality assurance, enforcing coffee regulations and dissemination of market information. Both internal and export marketing are regulated through The Coffee Regulations, 1994, a statutory instrument (Supplement No. 30 dated 16th November, 1994) which stipulate the requirements which have to be met including minimum standards of coffee traded at all post harvest levels within the coffee supply chain. The Regulations provide for registration of players dealing in internal and export marketing of the coffee, inspection and quality control including issuance of quality certificates, grade analysis, mode of coffee export sales, publication of indicative prices of various grades of coffee to all sector participants, repatriation of foreign exchange, books, records and accounts, administrative guidelines, offences, penalties as well as arbitration in case of disputes between the sellers and buyers. It also provides for amendments in case the Regulations need revision.

In order to decentralize operations at the district and lower levels, a Memorandum of Understanding (MOU) between UCDA and local governments was signed in 1998 to allow local councils to collect registration fees from coffee buying stores the proceeds of which would be utilized to develop coffee at the grass root. The local councils are obligated to notify UCDA the number of buying stores registered in a particular year.

In l992, the Government of Uganda designed strategies and action programs to improve the agricultural prospects for the cotton crop, support the domestic textile and oils industries and increase foreign exchange earnings through export of lint and by products. Among the major institutional and policy reforms was the rehabilitation and re-structuring of Co-op Unions, strengthening research and extension, removal of monopoly of co-ops over ginning and that of the Lint Marketing Board over export lint. As a result, a statutory body, the Cotton Development Organisation (CDO) was established to regulate and promote the cotton industry in Uganda.

Cotton seed by law belong to the CDO until they have acquired enough seed for planting. Seed procurement and dressing exercise is done by CDO and complimented by ginners.

Investment incentives include: Initial allowances on plant and machinery located in Kampala, Entebbe, Namanve, Jinja and Njeru-50%; initial allowances on plant and machinery located outside Kampala, Entebbe, Namanve, Jinja and Njeru-75%; start up costs spread over the first 4 years 25%; scientific research expenditure 100%; training expenditure 100%; depreciation allowances on farming-20%

With the exception of mining there is a uniform corporation tax rate of 30%, which allows the “carry forward of losses”.