Olam International Limited announced that it has sold Taraori Rice Mills Private Limited, the holding company for its rice milling assets in India to a Spanish rice and pasta manufacturer, Ebro Foods for US$14.5 million. Olam is a leading global integrated supply chain manager and processor of agricultural products and food ingredients.
The mill located in Haryana was acquired in 2008, and has a processing capacity of 18 tonnes of paddy per hour. The Global Head of Olam’s rice business, Rajeev Raina commented that India is an important sourcing origin for them. Hence while the basmati part of the business provided some sourcing synergies, the sales and distribution channel was separate from the non-basmati rice business.. Furthermore, a lot of investments in branding were required to grow the franchise.
Through this sale Olam is monetising more than the book value of fixed investments, as well as releasing working capital – which will be used to reinforce the core supply chain and trading business in non-basmati rice from India and other origins for our conventional markets.