Olam signs agreement with IFC to expand food facilities in Nigeria and India

Singapore-based food processor Olam International has entered into a $120m five-year loan agreement with World Bank Group member International Finance Corporation (IFC) for the expansion of its five food processing facilities in Nigeria and India.

The company plans to use the investment to upgrade its Hemarus sugar milling facility in Kolhapur, India; upgrade its spice processing in Cochin, India; expand its Crown Flour Mill in Lagos, Nigeria; establish a mechanical cashew processing plant; and set up a new sesame hulling facility in Lagos, Nigeria.

The Crown Flour Mill in Nigeria will be involved in processing imported wheat into flour for domestic bakers.

The remaining four facilities will bring together more than 45,000 small-scale farmers from surrounding regions into the company’s supply chains, allowing them to supply their crops directly to the processing units, which will guarantee a market for their products

Olam stated that the project will benefit local communities by creating new jobs and market opportunities for smallholder farmers.

Olam finance and business development executive director A. Shekhar said that IFC’s rigorous environmental and social review 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," Shekhar added.

The IFC’s agribusiness strategy seeks to strengthen food security, inclusive growth, and environmental and social sustainability in agricultural supply chains.

In line with this plan, IFC partners with supply chain integrators to provide small-scale farmers and rural businesses with access to finance, access to equipment and seeds, advice and extension services, and access to markets.