Olam Edible Nuts will buy Hughson Nut Company, a Central California almond processor, for $54 million in a move said to improve the vertical integration of the company listed on the Singapore Stock Exchange.
The announcement made Oct. 22 surprised some in the nut industry but was met with optimism as Hughson’s senior executive team and 400 employees continue to work there.
In a letter to customers, Olam said the acquisition will enable the company to provide an integrated offering across the almond value chain, including processing, inshell and blanched whole nuts, steam and PPO pasteurization, and value-added ingredients such as diced, flakes and almond flours. The letter also assured customers that contracts will remain intact as the company works to create a single point of contact for sales.
A similar letter was sent out to Hughson growers.
Olam is one of the world’s leading providers of edible nuts and in the past decade has grown to become the largest grower of almonds globally, with farming operations in California and Australia. Olam’s acquisition of one of California’s five largest almond processors is part of a strategic plan to offer various products to global customers.
“Our ambition is to grow Olam’s almond business into a vertically integrated player with a strong upstream presence in Australia and the U.S. and direct participation in the primary and ingredient processing space that can add value to our customers,” said Ashok Krishen, Olam’s managing director and chief executive officer in a public statement.
In an exclusive interview with Western Farm Press, Martin Pohl, a partner in Hughson Nut Co. and Ranjeet Kr. Pradeep, vice president of almonds with Olam Edible Nuts, said the focus going forward will match Hughson’s marketing efforts to sell bulk almond ingredients around the world. Hughson Nut does not have its own private label to consumers, and Pradeep says Olam will continue with those institutional sales.
Olam began in 1989 as a Nigerian-based exporter of cashews to India. Since then it has grown to a company selling 50 different commodities, including almonds, cashews, hazelnuts, walnuts, pistachios, cocoa, coffee, grains to about 23,000 customers in 70 countries. It does this with an employee based of 70,000, Pradeep said.
“This is a golden opportunity for us as growers,” Pohl said. “As we continue to produce more almonds, we’ve got to be able to sell them.”
Pohl and his partners, Ty Angle, Byron Baker and their families grew Hughson Nut from a small processor in 1985 to one that annually processes between 60-75 million pounds of almonds.
“We want to continue to be growers long term,” Pohl continued. “I went through the peach industry and I’m looking right now at unpicked grapes and I don’t want to get into a situation where the almond orchard has nuts in it that we can’t sell,” he continued.