Spice Value Chain Development

The project will support Akay''s investments across the spice value chain, from climate-resilient and inclusive farming models to processing and export of high-value spice products. The project will be developed in two phases. In phase 1, starting in FY2015 and with a total project cost of up to $10.4 million, Akay will invest in (i) expansion of sterilized spices business in India, (ii) expansion of its nutraceuticals plant in India, and (iii) investment in climate-resilient farming technologies for its organic farm in Cambodia. Phase 2 will begin after 31 March 2015, subject to satisfactory performance in Phase 1 implementation. The total phase 2 project cost will be $18.6 million, with Akay investing in (i) expansion of its seasonings plant in India, (ii) construction of an oleoresin extraction plant in Cambodia, and (iii) implementation of contract farming model in Cambodia. ADB will provide $16.5 million financing to Akay for the project. In addition, ADB will administer up to $5.0 million loans from the ADB Strategic Climate Fund. The project will help sustain high value-added agriculture growth in India and Cambodia. The project will promote regional integration, trade, and investment, particularly spice exports from India and Cambodia to the rest of Asia, and foreign direct investment in Cambodia from the rest of Asia. The project will also contribute to rural poverty reduction by including farmers in the global spice value chain.Akay is a leading high-value spice producer and exporter in India. Since its establishment in 1993, Akay has grown to one of the top five exporters of spice oleoresins in the world. It is headquartered in Cochin, Kerala and operates five processing plants in India with total capacity of 42,000 tons of raw material per year. It has a distribution network in 70 countries. Akay primarily exports to the United States, Europe, and the People's Republic of China.