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  "documentTitle": "Olam International Ltd. (SGX:O32)",
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  "authorName": "Carson Block",
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  "presentationDate": "2012-11-27 00:00:00",
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  "notes": "The slide presents a critical investment thesis regarding Olam's operational sustainability.",
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      "text": "Olam’s core trading business appears to be scaled well beyond what it should be.",
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      "text": "operating cash flow: S$2.5 billion",
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      "text": "Physical commodity trading is a difficult business. One can generate accounting profits, but cash is often plowed right back into working capital – especially inventories and receivables.",
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      "text": "Olam’s core trading business appears to be scaled well beyond what it should be. Since FY2009, trading volumes are up 86.6%, yet Olam’s operating cash flow has been negative S$2.5 billion.",
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      "text": "Olam’s trading business is also heavily dependent on export subsidies – particularly from the governments of Nigeria and Gabon.",
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      "text": "Our interpretation is that Olam’s core trading business model is not a good model when scaled up to its present levels. Olam’s pre-IPO success was based on its focus on niche trading commodities.",
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      "text": "The issue is that Olam does not have the same position, and therefore inherent advantages, in other commodities as it does in its core business.",
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      "text": "Incidentally, Olam could now be facing increasing competition in its niches. On November 13, 2012, Carlyle announced that it is leading a private equity consortium that is investing in Export Trading Group.",
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      "kind": "source-note",
      "text": "36 From Q12010 through Q12013. 37 http://www.ft.com/intl/cms/s/0/5bb7c8fe-2db4-11e2-8ece-00144feabdc0.html#axzz2CDaFoKR0",
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      "text": "Nigerian Export Incentives",
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