22 December, 2017
The EBRD is providing a loan of up to USD 150 million to the agribusiness trader Olam International Limited, one of the leading global traders in agricultural commodities, to support the company’s increasing engagement in Egypt, Georgia, Poland, Turkey and Ukraine.
Olam is already active in these countries and the EBRD loan will finance purchases of agricultural commodities such as hazelnuts in Georgia and Turkey, dry dairy products and grain in Ukraine, onions in Egypt and dry dairy products in Poland. Local subsidiaries of the company will take on the processing, storage and distribution of these goods.
USD 30 million of the total investment will support Olam’s activities in Egypt, to increase the volume of dried onions exported, while also transferring expertise to its suppliers from the firm’s operations in California. Olam has developed an innovative technology for onion production, significantly reducing the quantity of water required for conventional production of onions and helping to make more efficient use of Egypt’s water resources. In addition, Olam supports farmers in improving their agronomic practices.
This new financing agreement will continue the firm’s cooperation in Ukraine, where Olam is an exporter of dry dairy products and, increasingly, of grains.
Through its investments in Georgia and Turkey, two of the world’s leading producers of hazelnuts, Olam will meet the growing global demand for hazelnuts and increase the volume of sustainably sourced hazelnuts.
In a press conference hosted by the Ministry of Investment and International Cooperation in Egypt, Minister Sahar Nasr praised the joint cooperation between Egypt and the EBRD, saying: “The Bank's portfolio in Egypt has reached over EUR 3 billion, with about 70 percent of its investments in the private sector, and the EBRD has financed projects in infrastructure, small and medium-sized enterprises and renewable energy.” Minister Nasr also highlighted the importance of sustainable economic growth in eradicating poverty by providing long-term strategies for development.
Catarina Bjorlin Hansen, EBRD Deputy Head of Egypt, said: “We are delighted to be supporting Olam’s operations in Egypt, and across other countries where the EBRD invests. This loan is a perfect example of how we can work with a strong partner such as Olam to improve the competitiveness of locally produced food, help the Egyptian agricultural sector diversify into different crops, and support economic inclusion in the agricultural sector.”
Saurav Bhuwan, Vice President and Country Head for Olam Egypt, said: “Olam Egypt remains bullish about the opportunities that Egypt offers in the agribusiness sector. Over the past few years, we have established a strong business in vegetable dehydration, and have expanded the value chain to include onion farming in Egypt. We have also pioneered the development of a non-GMO variety of onion seed that uses half the amount of water and energy per tonne of output compared with conventional onion varieties. This is one example of how Olam is re-imagining agriculture by putting sustainability at the heart of our business. The loan from the EBRD will go towards growing our existing operations while also evaluating new opportunities both in the internal markets of Egypt as well as in the export markets."
The EBRD's cooperation with Olam started in 2010-11, when the Bank supported the agricultural trader’s expansion to Russia, Turkey and Ukraine with a USD 128 million loan.
Further development of the export potential of its countries of operations is one of EBRD’s priorities in the agribusiness sector.
To date, the EBRD has invested over EUR 10.3 billion in more than 600 agribusiness projects. All of its investments are in the private sector. By fostering strong links with the private sector, governments and other development partners, the EBRD aims to enhance agribusiness value chains and promote economic transition across the regions where it invests.