EBRD considers $125m loan to Olam

The facility would help the Singaporean agribusiness expand its operations in Egypt, Georgia, Poland, Turkey and Ukraine.

The European Bank for Reconstruction and Development is considering lending $125 million to Singapore-listed Olam Group, one of the world’s largest integrated commodity traders, to support the company’s expanding operations in five of the 70 countries in which it operates.

According to a document released by the EBRD, the loan would be used to finance the sourcing, processing, storage and transportation of agricultural commodities such as nuts, grains, dairy and dried vegetables in Egypt, Georgia, Poland, Turkey and Ukraine. Providing the loan would also increase local sourcing of agricultural commodities and the export potential of these countries, further integrating them into the global economy, the development bank said.

The EBRD is currently conducting environmental and social due diligence, which includes interviews with corporate social responsibility management and the review of documentation related to issues such as supply chain management, labor, sustainability, occupational health and safety, and waste management.

It is unclear whether other conditions are pending before the loan is approved, but a target board date has been set for November 16. The EBRD had not responded to a request for comment by the time of publication.

In addition to the $125 million loan, the bank is also considering providing technical cooperation to the company’s local suppliers in Georgia and Turkey, in order to boost the yields and quality of nuts and to acquire certifications on best agricultural practices.

Present in Ukraine and Turkey since 2005, Olam is a large supplier of cocoa products and cocoa beans to major confectioners in Ukraine and bills itself as the largest exporter of dry dairy products. In Turkey, Olam began operating by directly marketing cotton and sesame. The company later expanded into the export of pasta products to West Africa in 2009, while in the past six years it has built its position as a leading hazelnut exporter in the country.

The company’s operations in Poland date back to 2000 and its activities in the Eastern European country include coffee, sugar exports and distribution of cocoa products, spices and edible nuts.

However, the company does not provide details about its presence in Egypt, other than to say that it has two locations and 660 employees. Georgia is not listed among its locations. The company was not immediately available for comment.