Olam International sells Australian cotton gin business for $23.5 million

Olam Australia, the wholly owned subsidiary of Olam International, has sold its Dirranbandi cotton gin in Queensland to Cubbie Ginnery for A$20 million (S$23.5 million).

Olam Australia's executive director and country head Bob Dall'Alba said the decision to sell the gin was based on ensuring the best strategic and economic outcome for the company.

The sale is also in line with Olam International's strategy to unlock value and redeploy capital in higher growth areas, thereby optimising the overall cotton business for the group.

"As one of the world's largest cotton companies, ginning is at the core of our business and we are constantly looking at strategic opportunities to expand and serve growers and the market more effectively," he said.

Olam has confirmed that existing employees would be offered contracts by Cubbie Ginnery as part of the transaction.

"We will redeploy the manager of the gin to our Emerald operation, while five permanent and seven casual staff are being offered contracts by the new owner," said Mr Dall'Alba.

Mr Dall'Alba said the company was committed to continuing its ongoing relationships with its existing growers through its 10 state-of-the-art gins throughout Queensland and New South Wales.