The International Finance Corporation (IFC) will provide $12.5 million financing to Singapore-based agri-commodity trader Agrocorp International Pte Ltd to help the latter set up pulse and rice mills in India and Bangaldesh, said an IFC disclosure on June 7.
Agrocorp is currently carrying out an expansion program which includes the construction and putting into operation two pulse mills in India and a rice mill in Bangladesh with an estimated cost of $47 million. The investments will diversify and fill out Agrocorp’s origination and processing footprint, the disclosure added.
While IFC, the private investment arm of the World Bank, will invest in the form of A Loan, Global Agriculture and Food Security Program’s will extend loan of up to $2.5 million towards the project.
In the process, Agrocorp expects to develop long term relationships with farmers that will provide rice paddy and pulses to its new plants. IFC’s advisory services can help Agrocorp provide extension services to the rice and pulse farmers in Bangladesh and India to improve farmer livelihood, the disclosure added.
In India, Agrocorp has already carried out a feasibility study for the first pulses plant that will serve the south Indian market and is now in the process of identifying a physical location for the second plant that will serve the eastern and central markets of North India.
On the other hand, it is in the process of finalising the location of the rice mill in close proximity to rice paddies in Bangladesh. The investment in the rice mill in the country is envisaged to be a joint venture with a local partner, subject to IFC’s integrity due diligence procedures, the disclosure said.
Established in 1990, Agrocorp is currently present in 13 key origin countries and with customers in 30 consuming countries across Asia and Sub Saharan Africa. It claims to trade about 8 million metric tonnes of commodities such as pulses/legumes, wheat, rice, raw cashew, sugar, grains, oilseeds, and cotton, and owns four pulses and wheat processing facilities in Canada and a rice mill in Myanmar.
Vijay Iyengar is the major shareholder of Agrocorp with a 69% stake, while Ravi Raghavan and Akila Vijay Iyengar, Vijay Iyengar’s wife, hold 25% and 7% stake respectively in the company.