The Singapore Stock Exchange-listed group Olam has secured a $175 million loan from the International Finance Corporation (IFC) for its processing facilities in India and Nigeria.
The five-year loan from the World Bank’s private investment arm will be invested in improvements to the group’s Hemarus sugar milling and spice processing facilities in India, as well as sesame hulling and Crown Flower Mills plants in Nigeria.
IFC representatives said the loan is aligned with its mission to build rural economies and global food security.
The IFC’s director of manufacturing agribusiness and services, Alzbeta Klein, said in a statement that “[…] investing in long-term midstream processing assets [… builds] on the core soft commodity supply chain.” He added that smallholder farmers in Nigeria and India would benefit, as suppliers to Olam.
Olam, which operates in 70 countries and has holdings throughout the agribusiness value-chain, acquired the sugar milling facility as part of its acquisition of Hemarus Industries for $73.8 million in 2011. The group acquired Crown Flour Mills the previous year for $107.6 million.
Indian sugar production has declined this year, after the country produced 366.8 million tons of sugar in the 2014-15 season. Wheat production in Nigeria is expected to decline to by 10,000 tonnes to 60,000 tonnes this year, due in part to farmer displacement through violence. Rising demand is expected to push wheat imports up to 5 million tonnes in 2016.
In 2015 the IFC’s long-term private sector investments in emerging markets came to almost $18 billion.
The same Olam facilities, along with a cashew processing plant in Nigeria, benefitted from a $120 million loan from the IFC in 2013.