The International Finance Corp. (IFC) is backing Olam International with $175 million to fund the group’s expansionary initiatives in India and Nigeria, according to VC Circle. Under the terms of the proposed financing, Olam will receive a $100 million loan facility, and up to $75 million through the IFC’s co-lending program.

 

A portion of the funding will be used to upgrade and modernize the group’s sugar and spice production facilities in Kerala and Maharashtra in India. The group’s sugar business, operated through Hemarus Industries Ltd., and its bulk spice business, which is operated through Vallabhdas Kanji Ltd., were both acquired by Olam in 2011 for $73.8 million and $18 million, respectively. The acquisition provided Olam with the capacity to crush 3,500 tons of cane per day and a 20 MW co-generation facility. At the point of acquisition, Olam had stated that it had plans to invest $6.6 million to upgrade the business’ milling capacity to 5,000 tons per day.

 

The group is also planning to use a portion of the funding to finance the expansion of its flour milling activities, and the modernization and upgrading of its sesame hulling facilities in the Delta and Ogun states in Nigeria. In relation to these plans, Olam also announced on November 27 that it was seeking to expand its grains platform in Nigeria into animal feed and related business, reported Oilseed and Grain. Olam announced that it plans to leverage its existing wheat milling business in Nigeria to source the bran needed for its animal feed facilities.  

 

Established by the Kewalran Chanrai Group in 1989, Olam’s largest shareholder is the Singaporean government’s investment arm, Temasek, which holds a 51.4% interest. Mitsubishi Corp holds a 20% stake, Olam’s senior management holds 6% of the group, and Kewalram Chanrai Group holds 4.8%. All remaining shares are held by individual and institutional investors.