IFC inks accord for $5m investment in rice unit
KARACHI: The International Finance Corporation (IFC) singed an agreement on Wednesday for $5 million equity investment in rice processing unit to help expand its production capacity and exports.
In this regard, the IFC chief of mission in the country, Nadeem Siddiqui, and the managing director of Matco Rice Processing (Pvt) Ltd, Jawed Ali Ghori, exchanged documents at a signing ceremony held at a local hotel.
The IFC’s equity investment would help Matco boost production at its plant in the village of Sadhoke, Gujranwala which will directly benefit growers of the area and also create job opportunities.
Nadeem Siddiqui said this is corporation’s first investment in the agribusiness sector in Pakistan. He further said that IFC’s forward looking strategy is to increase its investment in Pakistan’s cost competitive agriculture sector.The agriculture sector in Pakistan, he said, contributes nearly 20 per cent of the GDP and is a source of livelihood for nearly 45 per cent of the total employed workforce.
He further said that rice is a key export item accounting for 13 per cent of Pakistan’s total exports. Over the last six years, Pakistan’s overall rice export sales have grown by a compounded annual growth rate of 24 per cent.
Mr Siddiqui said that the IFC investment would help increase storage capacity and bring efficiencies to rice supply chain. The basmati rice industry in Pakistan, he said, faces challenges related to large number of intermediaries, supply chain bottlenecks which causes significant damage and loss to rice crop, along the supply chain.
The IFC chief said that the active portfolio of agri-related investments is approximately $4.5 billion the world over and would be funding more such projects in Pakistan.
He further said that the IFC would also help raise Matco’s profile as the company prepares for an IPO, advise corporate governance assistance and help improve board’s functions and structure.
Jawed Ali Ghori of Matco said that IFC’s funding would help his company transform from a family-owned company to a public-listed company and make the planned initial public offering more appealing for potential investors.
He further said that Pakistan is one of only two countries in the world that produce basmati rice and annual harvest of the aromatic veriety of the grain reaches 2.5 million tons.
Pakistan is also the fourth largest exporter of rice, which accounts for 13 per cent of the country’s total exports.
Mr Ghori said that Matco’s Sadhoke project is an integrated rice paddy drying, storage, husking and parboil and processing plant.
He further stated that his company had completed Phase-I of the project successfully and brought the plant into commercial operations.
The IFC investment of $5 million or Rs457 million towards Phase-II expansion of the project would take total project cost to Rs1.6 billion.