The International Finance Corporation (IFC), a member of the World Bank Group, and Olam International, a global integrated supply chain manager and processor of agricultural products, announced that they have signed a five-year $120 million loan agreement to finance upgrades and expansion of five food processing facilities in Nigeria and India.
It was revealed in a joint release that the projects would benefit local communities by generating rural employment and creating new market opportunities for smallholder farmers to sell their crops.
IFC financing will support the following facilities operated by Olam: Crown Flour Mill, Lagos, Nigeria (expansion); Mechanical cashew processing, Ilorin, Nigeria (new); Sesame hulling, Lagos, Nigeria (new); Hemarus sugar milling, Kolhapur, India (upgrade); Spice processing, Cochin, India (upgrade).
The Crown Flour Mill in Nigeria will process imported wheat into flour for domestic bakers. The remaining four facilities will integrate by 2015 more than 45,000 small-scale farmers from surrounding regions into Olam’s supply chains by allowing them to supply their crops directly to the processing units, thereby guaranteeing a market for their products.
Olam’s Executive Director for Finance and Business Development, A. Shekhar said, “Our partnership with IFC reiterates Olam’s continued focus of enabling economic prosperity and social and environmental sustainability throughout Olam’s operations.
“IFC’s rigorous environmental and social review has been focused on the five processing facilities to ensure they meet IFC’s stringent loan criteria. However, IFC has also reviewed a range of Olam’s policies, procedures and management initiatives that apply throughout our supply chain and we will continue to build on these best practices in line with the Olam sustainability standard.”
IFC Director for Global Manufacturing, Agribusiness and Services, Atul Mehta, added: “Olam is a critical link between small farmers, businesses and global markets. It is a supply chain manager and partner for leading multinational corporations and recognised brands – all of whom are looking to improve traceability of their sourcing and address sustainability issues in their supply chains.”