The International Finance Corp. (IFC), the private sector investment unit of the World Bank, is investing $12.5 million from its own account in support of Agrocorp International’s plans to build three food grain milling operations in India and Bangladesh. An additional investment of $2.5 million is being committed by another investor, Global Agriculture and Food Security Program. Founded in 2010, Global Agriculture and Food Security Program makes investments in both the private and public agricultural spaces with the goal of reducing poverty while raising food security. Private sector investments made by the program are backed with IFC funds, according to VC Circle.
Under the company’s expansion program, the construction of two pulse mills is planned for India, while scouting is currently underway to find a location for an additional rice mill in Bangladesh. Feasibility studies for the first pulse plant, which will supply the southern region of India, have already been completed, while the company is still identifying an optimal location in the north that would serve India’s northeastern and central markets.
Meanwhile, Agrocorp is in the process of completing the selection of a site adjacent to rice paddies in Bangladesh for its planned rice mill, which will be pursued through a joint venture with a local partner and will be subject to IFC’s integrity due diligence.
Agrocorp International is a Singapore-based commodity trading house that has been in operation since 1990. However, the company did not venture into processing until 2012. Today the company has grown to have offices in 13 countries, a trade volume in excess of 6 million tons of grains, pulses, sugar, oil seeds, cashews and cotton; four pulse and wheat processing facilities in Canada, and a rice mill currently being established in Myanmar. Once the Myanmar site is online, Agrocorp expects to see processing volumes of 400,000 tons this year, according to the company website.
This expansion plan enhances Agrocorp’s presence in emerging markets where grain and pulse processing is poised to see significant growth.
India is ranked first in the world in terms of area and production of pulses, according to LANSA South Asia, however the country remains a net importer of pulses in order to meet demand. LANSA concludes that after accounting for waste, the per capita availability of pulses in india stood at 38 grams per person per day in 2014 – falling short of the recommended daily requirement of 40 grams per person per day.
Food processing engineer Er.Ganesh Shelke said that between FY06-13, India’s food processing industry saw compounded annual growth of 6.3 percent, adding that based on the potential for value addition, India’s food processing sector, which accounts for about 32 percent of the country’s total food market, is positioned to see sizeable growth.
Agrocorp is also capitalizing upon growing global demand by expanding its presence in the Canadian origination market with the announcement in May of last year that it had agreed to acquire Saskatchewan-based grain and oilseed processor and exporter, Veikle Grain Ltd., for an undisclosed amount.
“As Canada transitions to become the major supplier of protein for the world’s increasing population, we at Agrocorp are excited to be a part of this global story,” said Colin Topham, managing director for Vancouver-based Agrocorp Canada, in a company statement. “We continue to accelerate our bulk vessel and containerized business in Canada, both in major grains and specialty crops.”
-Lynda Kiernan
Lynda Kiernan is Editor with GAI Media and daily contributor to GAI News. If you would like to submit a contribution for consideration, please contact Ms. Kiernan at lkiernan@globalaginvesting.com