What's Happening?
Olam Group has decided to close its digital farmer services platform, Jiva Ag, due to challenging market conditions and the expected investment required to sustain the business. This decision impacts 606 employees, primarily in Indonesia, with some in India, Australia, and Singapore. The closure is part of Olam's Updated 2025 Re-organization Plan aimed at de-leveraging the company's balance sheet and making it debt-free. Jiva, launched in 2020, provided agronomic advice, credit facilities, and access to ag technologies to smallholder farmers across Asia and Africa.
Why It's Important?
The shutdown of Jiva reflects broader challenges in the agribusiness sector, particularly in sustaining digital platforms amid difficult market conditions. This move is part of Olam's strategy to streamline operations and focus on core business areas. The impact on employees and the loss of services for farmers highlight the difficulties faced by companies in maintaining digital initiatives in the agricultural sector. The reorganization plan, including the sale of stakes in Olam Agri, indicates a shift towards financial stability and strategic divestment.
What's Next?
Olam Group is working on redeployment and severance packages for affected employees. The company plans to divest its remaining stake in Olam Agri, giving full control to Saudi Arabia's SALIC. Intellectual property associated with Jiva will be retained by Olam or its subsidiaries. The focus will be on implementing the reorganization plan to achieve financial sustainability and operational efficiency.
