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Investor Relations

Optimising our manufacturing capabilities

By Jeff Pfalzgraf, Global Head of Manufacturing, Olam Cocoa

We began and are concluding the year, running our cocoa factories at full speed. At times, a challenging market and the global impact of a poor cocoa crop necessitated some speed reductions. However, we have overcome these challenges and have successfully met through-put targets and melting rates.

Manufacturing successes have been achieved in areas including de-bottlenecking the Goole, UK and Koog, Netherlands melting operations, and through focused investments to increase the production capacity of improved products out of our Mannheim, Germany factory. The Singapore cocoa team instituted improved process control measures and set numerous monthly records in the production of specialty cocoa powders. We employed similar improvement measures in Ilhéus, Brazil and ensured that the factory there was running at capacity standards to meet growing industry needs.

Manufacturing yields did suffer at times because of the reduction in cocoa bean fat content and increased cocoa bean counts. This was a global issue that impacted all regions on the back of the worst growing season in 30 years. Our teams responded by forming a global working group to reduce solids and waste stream fat contents. All locations were successful in reducing press fats and identified a number of further capital improvements to be instituted in 2017 for the reduction of fat in waste streams.

Pleasingly, Olam’s cocoa business is enjoying the best safety year ever. Year to mid-December, we have had only one Lost Work Day Case and two Medical First Aid Cases with nearly four million man-hours worked.

The operational improvements on our melting operation in Goole, UK, and our milling asset in Edison, US will be key to supporting our 2017 plans. These will enhance our ability to deliver semi-finished products from origin to customer in all major destination markets. In addition, there is significant work being done to improve our cost basis through optimising energy, labour utilisation and improving efficiencies – all actions that will support our competitive advantage.