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Olam obtains US$176m term loans to buy agri-commodities from smallholder farmers
AGRI-FOOD giant Olam International has obtained US$176 million in term loans to procure agri-commodities from smallholder farmers, and expand its Indonesia cocoa processing facility.
The loans, from the International Finance Corporation (IFC) and Japan International Cooperation Agency (JICA), consist of two tranches. One is a five-year term loan of US$120 million, while the other is a seven-year term loan of US$56 million.
With the proceeds, Olam will procure the agri-commodities from smallholder farmers in Vietnam, Indonesia, Timor-Leste, Papua New Guinea and Uganda, the mainboard-listed group said on Wednesday in a regulatory filing.
Doing so will help smallholder farmers reach global markets and boost their incomes, said Tomasz Telma, IFC senior director, manufacturing, agribusiness and services.
Said Junichi Yamada, JICA senior vice-president: "We expect sustainable cacao business in Indonesia will be expanded through this loan facility, which we believe will provide stability to smallholder farmers."
"Olam has been actively working to build a global, sustainable agri-business, and in Indonesia, considerable efforts have been made to tackle environmental and social issues," he added.
Olam managing director and group chief financial officer Neelamani Muthukumar said the term loans will provide support, stability and reliable access to smallholder farmers, particularly in these challenging times.
Olam shares closed at S$1.45 on Tuesday, up S$0.01 or 0.7 per cent.