International Finance Corporation, the private-sector investment arm of the World Bank, is planning to invest up to $25 million (around Rs 160.7 crore) in Dubai-based organic food company Agrex Ltd.
Agrex will use the funds for setting up greenfield processing facilities in Sri Lanka, Uganda, Ethiopia and The Philippines, IFC said in a disclosure.
The total project cost is estimated to be $35 million. Other investors will make an equity infusion of $5 million while the remaining $5 million will be funded through a mix of cash, internal accruals and debt from other financial institutions.
Founded in 2012, Agrex is engaged in sourcing, processing and exporting certified organic produce from countries in Asia and Africa.
Its founder Sameer Mehra holds around 45% stake. The remaining 55% is held by venture capital firm Nexus Venture Partners and alternative asset management firm Capricorn Investment Group through their investment vehicles, according to the disclosure.
Agrex’s operational assets include a leased virgin coconut oil processing facility in The Philippines and a fully owned sesame seed cleaning and sorting facility in Uganda. It has a contract manufacturing arrangement with a third-party soyabean and sesame processing plant and warehouses in Ethiopia. It also has arrangements with third-party textile manufacturers for its organic clothing business.
The company has organic farming arrangements with farmers and farmer groups in Uganda, Ethiopia and Philippines with a total farming area of around 35,000 hectares in these countries. The firm does not own or lease any of these farms. It only procures organically grown produce from the farmers.
Earlier this month, IFC proposed to invest up to $20 million (Rs 128 crore) in organic food exporter Suminter India Organics Pvt. Ltd.
Incidentally, both Suminter India Organics and Agrex are founded by Sameer Mehra. Nexus Venture Partners and Capricorn Investment Group are investors in both the firms.
IFC has made a bunch of investments in the agribusiness space. In June, it proposed to invest in the food-grain milling plants of agri-commodity trading company Agrocorp International Pte. Ltd.
In June, it made a debt investment of $30 million in ETC Agro Processing (India) Pvt. Ltd.
In May 2016, IFC made a debt investment of $100 million in Singapore-based commodities merchant Olam International Ltd to finance its projects in India and Nigeria.