Agrocrops Singapore Pte. Ltd.
Status: Investment in contracting phaseWhy disclosure?
FMO is committed to making publicly available relevant investment information that informs stakeholders and enables them to engage directly with FMO on its investments which, in turn, enhances our investment decisions, the design and implementation of projects and policies, and strengthens development outcomes. Learn more
In case of questions
In case of questions, please contact us at disclosure@fmo.nl
Disclaimer
The information as disclosed is indicative and provided on an "as-is/as available" basis for general informational purposes only and should not be construed as financial, legal or investment advice, nor as a commitment or an offer to arrange or provide any financing. The final decision to provide financing is subject to the terms and conditions of FMO in its sole and absolute discretion. When providing links to other sites, FMO bears no responsibility for the accuracy, legality or content of the external site or for that of subsequent links. The information on proposed investment for high-risk investments is made available in the language relevant to the country or region where the bulk of operations take place. Translations of any information into languages other than English are intended as a convenience for local stakeholders. In case of any discrepancy, the information provided in English will prevail.
Who is our prospective customer?
Originally founded in 1970 as a commodity trading company in Chennai, India, Agrocrops Singapore Pte. Limited is now in the process of transitioning into an integrated agricultural company. Its operations are conducted through an integrated business model in which they source, process and trade peanuts via entities in Singapore, Hong Kong and India. Agrocrops Singapore and Agrocrops Hong Kong focus on trading of unprocessed and value-added peanut products from India and other global regions to Southeast Asia. In India, domestically procured peanuts are processed into value-added products at Agrocrops' own factories in Chennai and Gujarat. A fourth factory will be commissioned in Karnataka by mid-2024. All products are sold to Agrocrops Singapore and Agrocrops Hong Kong for the international export market, and in India to B2B clients. In addition to its peanut operations, the group operates a subsidiary, Agrocrops Spices which is GLOBALGAP certified.
What is our funding objective?
The project is a USD 7.5-million package, financed from the Dutch Fund for Climate and Development. The funds will be used to strengthen Agrocrops’ upstream activities by increasing its processing and purchasing capacity of peanuts. In total, USD 5 million will be used for the procurement of the peanuts both from India by extensively working together with Farmer Producer Organization and from Africa. In the future, this same Farmer-Producer-Organization practice as in India will be applied to the African markets. USD 2.5 million will be used to expand the company’s processing capacity in India. FMO will collaborate with Finnfund to support Agrocrops in this project.
Why do we want to fund this investment?
The integrated ‘farm to fork’ business model is the main reason for us to partner with Agrocrops. The proposed transaction fits FMO's strategy, as financing integrated trader-processer companies is crucial in reaching farmers in emerging markets. Agrocrops can support these farmers with direct foreign investment to transform the food supply chain and improve the health of critical ecosystems in developing countries. This is through supplying farmers with Good Agricultural Practices (Global GAP Certification), preserving the soil life, soil moister and soil nutrients. The transaction also provides us with the opportunity to work with a company at a tipping point transforming from being an everyday trader to an industry example, who collaborates with farmers to produce high-end sustainable products for a growing consumer (export) market. Our intention is to pioneer with this transaction, to help develop the peanut market in India and Africa, and to prepare the client and ourselves to scale up to a larger transaction in a few years.
What is the Environmental and Social categorization rationale?
This concerns an E&S B+ categorised investment. The categorization is based on: first, the labor and working conditions and related human rights risks in the fragmented and complex supply chain beyond the immediate company's control and leverage, and second, on the plans to increase the number of smallholders to source from in India and in high-risk countries (China and African countries). Focus areas include the integration of an overarching E&S management system, E&S capacity, labor and working conditions with (migrant) workers and construction workers. Relevant IFC PS are PS1 Assessment and Management, PS2 Labour and working conditions, PS3 Resource efficiency and resource prevention, and PS4 Community Health, Safety and Security; this includes related supply chain risks under these PSs. PS5 is not relevant; if in the future land is acquired, policies and procedures will be in place to prevent unvoluntary economic or physical resettlement. For PS6 and PS8, in case of extension of activities and sourcing in India or abroad, policies and procedures will be in place to prevent negative impacts on biodiversity and cultural heritage. PS7 is not relevant because project activities are not impacting Indigenous Peoples.
More investments
| Date | Total FMO financing |
|---|---|
| 3/17/2024 | USD 2.50 MLN |
- Website customer/investment
- https://www.agrocrops.com/en
- Region
- Asia
- Country
- Singapore
- Sector
- Agribusiness, Food & Water
- Publication date
- 1/17/2024
- Deadline for feedback
- 3/17/2024
- Total FMO financing
- USD 5.00 MLN
- Funding
- LUF
-
Risk categorization on environmental and social impacts, A = high risk, B+ = medium high risk, B = medium risk, C = low risk
Environmental & Social Category
(A, B+, B or C) - B+