Olam International to sell part of forestry assets, saw mills in Gabon to China investors

Olam International has agreed to sell part of its forestry and saw milling assets in Gabon for US$18 million (S$22.8 million) to a consortium of Chinese investors.

The divestment, which is a part of Olam's revised strategy to restructure the Wood Products portfolio, includes the sale of two saw mills in the Makokou region, 2.5 hectares of land in the Special Economic Zone at Nkok and associated forestry concessions.

The transaction will result in a one-off loss of US$4.5 million on the sale of assets.

Olam will also record a one-time restructuring charge of US$6.5 million.

The sale of the business is expected to generate annualised manufacturing and overhead cost savings of some US$13.5 million from 2015, reduce the fixed capital invested in the business by US$22.5 million and release US$20 million of average working capital invested in this business.

The transaction is expected to close in the fourth quarter.