Singapore, April 4 - Singapore-based agriculture products supplier, Olam International, plans to start new businesses and acquire more firms which would contribute about 40 percent of revenue growth in the next six years.
The company, which supplies ingredients to some of the world's top food firms like Nestle, has bought eight companies in the last 15 months but refused to comment on talk that it plans to bid for Australia's Dairy Farmers.
The Australian milk and cheese producer is owned by some 2,000 local farmers and put itself up for sale in February. has received an initial offer from Australia's dairy and juice producer National Foods, owned by Japanese brewer Kirin Holdings, that values the firm at $920 million.
"Our acquisition guideline is to make acquisitions not larger than 10 percent of our market capitalisation. But that doesn't mean we would not go for a bigger target," Olam Chief Executive Sunny George Verghese told Reuters in an interview on Friday.
Verghese said the company's recent plan for a S$307 million ($222 million) preferential share sale would allow it raise up to S$1.6 billion ($1.2 billion) in new debt which could then be used for acquisitions and funding of the existing business.
He said the the $2.8 billion company, that aims to deliver compound annual growth of up to 20 percent in revenue and up to 30 percent in net profit, would be comfortable with a net gearing of 5 times, which would mean about S$4.5 billion in total debt.
Olam, which deals in 17 agriculture commodities like cocoa, coffee, rice, sugar, cotton and dairy products, recently started palmoil, rubber and soybean businesses and Verghese said the company would launch seven or eight new commodities businesses in the next six years.