Olam Vietnam: sustainability more than catchphrase

But just as essential to Olam’s growth and success has been a focus on what are often known as ESG – environmental, social and governance – protocols. As it is for ANZ. 

"Growing responsibly is now a central motive of Olam … sustainability is not a catchword.” - Prakash Jhanwer

When we talk about sustainability, we mean all three elements of ESG. Without them ANZ – or indeed any company – cannot hope to be truly sustainable. We couldn’t deliver consistent, future earnings for our shareholders; or a rewarding place to work for our employers; or support the communities in which we operate.

But we must ‘walk the talk’ by managing our own impact, promoting a culture of sustainability and, above all, working with customers to help and support them to be more sustainable too.

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It was a point Prakash Jhanwer, president, South East Asia & China, at Olam - an ANZ client – made cogently when I spoke with him for this podcast during an ANZ executive committee delegation to Vietnam. Olam too places great importance on operating sustainably, especially given the many challenges facing agriculture, from climate change to farmer poverty. Prakash sees it as fundamental to Olam’s sense of purpose as a company which is to re-imagine global agriculture and food systems.

“Growing responsibly is now a central motive of Olam,” he said. “We believe sustainability is not a catchword - it needs to be embedded in our day to day lives as individuals, as well as in our operations.”

“For sustained agri production in a consistent and sustainable way, we need to incorporate sustainability. The key challenge for us is how do we embed it in a business idea and create value out of it? I think that is the idea that is really the Holy Grail for us.”

At ANZ, we’re making sure who we bank and what we finance is driving a just transition to a more sustainable future.

That can mean supporting our larger customers to invest in projects with positive environmental outcomes - for example by arranging the largest sustainable loan in the Asia Pacific and supporting Investa Commercial Property Fund to build their low carbon commercial property portfolio.

We recently issued a $A400 million green bond for Woolworths to finance low carbon buildings, energy efficiency projects and renewable energy assets for owned and leased Woolworth’s supermarkets across Australia.

Just as Olam is working with customers and suppliers, we are in active discussions with our largest corporate customers in carbon-intensive industries as they look at further ways to cut emissions and support the transition to a low carbon economy.

Olam is originally Nigerian but is now based in Singapore. It is a multinational agribusiness which uses Vietnam as a “centre of excellence” for its Asian trade operations, a hub from which it imports commodities from all over the world, processes them, and then redistributes products throughout the region.

Prakash said a big advantage was Vietnam’s absence of tariffs and its position as a “gateway” to ASEAN.

“We get a zero-tariff treatment wherever we export across ASEAN, as well as China,” he said. “But the icing on the cake is it's pretty easy to set up operations in Vietnam. We get the fastest route to market we find across countries… and the quality of people is fantastic. They get on with it, they are hungry and our people just do an amazing job.

“I would say Vietnam is a relatively unknown place to many foreigners, so they feel it must be difficult, but in fact, it is one of the easiest places to start a business in Southeast Asia, we believe.”

Provenance

Olam’s purpose is to Re-imagine Global Agriculture and Food Systems to achieve three outcomes – prosperous farmers and food systems; thriving communities; and regeneration of the living world.

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One of the really interesting things I found talking to Prakash and others from Olam is the company’s relationship with its growers – many of whom are small family or community farmers.

As an outside observer, the company seems to have a very strong sense of custodianship with these communities - and takes that responsibility very seriously.

“We definitely believe the farmers, or the smallholders as we call them, are probably the ones who are struggling the most,” Prakash said. “Because they are open not only to a lot of natural vagaries but also the volatility in commodity prices. And they are the most vulnerable in this situation.”

Olam has spent 15 years supporting the capability of its smallholders to ensure their income streams are sustainable.

“Once their income goes up, their ability to invest in irrigation [for better water management] goes up and they are able to bring up their families in a far-more sustainable manner,” Prakash said. “I think that is very critical.”

To me that resonated very strongly with ANZ’s purpose to shape a world where people and communities thrive.

Right time

Our executive committee visit to Vietnam reinforced the opportunity – which was always there – and timing – which is now propitious. It is a valuable market for ANZ and we want to help connect Vietnam into the trade-and-capital opportunities around this region.

I agree with Prakash: “It is a large population which is hungry to work. I think the [next 10 to 12 years] can be some of the most-transformative for Vietnam. I'm quite bullish about the prospects of Vietnam in the next decade.”

You can listen to our full conversation above.

Shayne Elliott is Chief Executive Officer at ANZ