ETG Term Facility

active

  Established in 1967 in Kenya, ETG is a vertically integrated agricultural supply chain manager involved in the origination, procurement, warehousing, logistics of multiple agricultural commodities and processing of consumer products. It is active in over 26 African countries, as well as in India, China and South East Asia and has additional trading, merchandising and/or treasury desks in Europe, the Americas and the Middle East.ETG annually sources more than 7 million metric tons (MT) of agricultural commodities around the world and directly employs more than 7,000 people globally. Its product portfolio is well diversified across agro-commodities (over 25 types of which 10 – 12 are prime commodities e.g. cashews, oilseeds, sugar, coffee, pulses, wheat, rice, maize, sesame seeds and fertilizer) and origins (over 40 countries). The company organizes itself into 5 business units, or verticals: (i) the Exchange Traded Vertical (primarily trading maize, wheat, oilseeds, sugar and coffee over the various commodity exchanges of the world and sourcing such commodities from all over the African continent); (ii) the Cash Traded Vertical (trading in pulses, sesame, cashew and rice, procuring from all the major producing areas in Africa, Canada, Australia, China and South East Asia); (iii) the Agri-Inputs Vertical (major focus on fertilizer distribution to African farmers along the same ETG supply chain that transports their commodities outwards, along with other farming inputs and agronomic services to farmers while purchasing their agricultural outputs); (iv) Warehousing and Logistics Vertical (operating and managing several multi-sized warehouses, depots for containerized cargo at strategic ports, including Dar es Salaam, Mombasa, Beira and Durban, and primary processing facilities and trucking operations); and, (v) the Fast Moving Consumer Goods Vertical, AKA as Vamara, producing several consumer branded products across a number of key East, Central and Southern African countries and selected international markets from manufacturing and/or processing plants in South Africa, Zimbabwe, Zambia, Malawi, Uganda, Kenya and Ethiopia.The Project supports ETG in financing its long-term incremental working capital needs mainly in Sub Saharan Africa (“the Project”). The estimated project cost is $115 million. IFC’s use of proceeds will specifically support the Project with an investment of up to $10 million in the form of an unsecured corporate loan. The funds are expected to be utilized mainly in Sub Saharan Africa to finance ETG’s trading flows in agro-commodities, including cashews, pulses and commodities associated with high E&S risks in the supply chain, such as cocoa in West Africa.IFC has had a series of investments with ETG over the last ten years. For example, Export Trading Group (ETG, #28472), disclosed in October 2009, at: https://disclosures.ifc.org/#/projectDetail/ESRS/28472 and ETC Group (#32863), disclosed in February 2013, at: https://disclosures.ifc.org/#/projectDetail/ESRS/32863. More recently, IFC financed two ETC Agro in May 2017 to finance the setup of a greenfield pulses processing plant at Kolkata in India (#39370) disclosed at: https://disclosures.ifc.org/#/projectDetail/ESRS/39370) and in July 2020 (#43027),  disclosed at https://disclosures.ifc.org/#/projectDetail/ESRS/43027).  The Environmental and Social (E&S) performance of the previous ETG investments (#28472 and #32863) were judged to be satisfactory at the time of ETG repayment of IFC loan; likewise, those of ETC Agro in India have been judged satisfactory based on IFC’s supervision to date.A comprehensive Advisory Services engagement is associated with this project. It is being developed to enhance the efficiency of ETG's sesame, maize and soybean supply chains by improving the productivity and reducing post-harvest losses of 200,000 smallholder farmers in Mozambique, Tanzania and Zambia by December 2023. The project will mainly focus on enhancing the productivity and efficiency in ETG operations and supply chains. Moreover, smallholder farmers will increase their income by following good agricultural practices (GAPs); reducing post-harvest losses; having improved access to inputs; and through a guaranteed market for farmer produce