International Finance Corporation (IFC), a member of the World Bank Group has finalized arrangements with the management of Promasidor Nigeria Limited, makers of Cowbell milk, Onga seasoning, Loya milk and Top tea to grant the latter a $25m loan (over N8bn) which would be used to expand production and improve efficiency at the company’s Lagos plant.
According to Olivier Thiry, the Managing Director of Promasidor Nigeria Limited (PNL), the capital injection would be used to support purchases of new machinery that will enable Promasidor enhance efficiency, expand production and develop new products, leading to greater availability of nutritious food products in Nigeria at competitive prices.
“This is a very competitive market for food products. We expect that this investment will help us optimize production costs, enabling us to reach and nourish more consumers with our affordable range of quality products. We will also target our portfolio extension by gradual integration of more locally sourced raw materials from producers in Nigeria and widening our network of distributors,” he said.
He said that with the abundance of business opportunities in the Nigerian market, the investment was needed as the company could not meet the demands for its products across the country, hence the need to expand production.
In her own words, Jean Moyo, IFC Head of Manufacturing, Agribusiness and Services for Sub-Saharan Africa said: “Agribusiness is Nigeria’s largest employer. Increasing investment in food-processing companies like PNL will help diversify Nigeria’s economy and improve nutrition by expanding the supply of affordable food.”
IFC said it invests in Agribusiness to increase productivity with an end goal of greater food security, higher rural incomes, and improving environmental and social sustainability on the continent. The average African farm, according to Moyo, currently performs at just 40 percent of potentials.
The organization is forecasting that by 2030, the continent’s agriculture and agribusiness market is expected to triple in value to $1 trillion. Africa needs more than $10bn in new investment every year to achieve this aspired expansion of output.
In the fiscal year ended in June 2016, IFC’s overall long-term investments in Sub-Saharan Africa stood at $3.7bn. This investment includes more than $1.8bn mobilized from other investors. IFC clients provided 240,000 jobs, supported nearly 1.2 million farmers, and treated nearly 960,000 patients.
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