ERJ staff report (PR)
The Republic of Gabon is to invest $56.8m (€41m) towards equity and to increase its stakes in its palm and rubber joint ventures with Olam International Ltd in Gabon, agri-business Olam has announced.
The move concerns the Olam Palm Gabon (OPG) and Olam Rubber Gabon (ORG) JVs, which are owned 70% and 80%, respectively, by Olam. On completion of the deal, Olam’s equity interest in both OPG and ORG ventures will reduce to 60%, with Gabon holding the remaining 40%.
This reflects the strategic importance of these projects to the Gabonese economy, said Olam. Of particular significance, it noted, is the generation of local employment in the rural areas and the potential to attract other industry participants and promote the country’s nascent palm and rubber industries.
The transaction is expected to release cash of around $30m for Olam, and will result in a gain of $14.5m that will be credited to capital reserves.
“For Olam, the transactions are in line with its strategic plan to unlock value by seeking strategic partners to co-share investments in capital intensive and long gestation projects,” the company stated.
ORG projects have included planting 2,019 hectares of rubber in Bitam as at end-February as part of a phase 1 development of 28,000 hectares. The rubber JV has also initiated its own benchmark standards based on learnings from its ‘sustainable forest stewardship’ activities.
Over 4,100 local Gabonese are currently employed full time between OPG and ORG and around 3,000 additional jobs in indirect employment have been created, said Olam.
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