URL Expansion

completed

United Riceland Private Limited (URL or the company) is a HACCP certified portfolio company engaged in milling and exporting basmati rice, mainly to the UK. In 2002 IFC disbursed $10 million for the establishment of a modern rice mill in Gurgaon, Haryana Province. URL is current on debt service, with the next installment due June 15, 2005. The loan is serviced from the existing plant in Samana. Project implementation has been slower than expected due to a combination of legal issues, technical redesign and market access uncertainty. The Gurgaon facility currently is expected to begin processing trials in late February 2005. The sponsor has requested a second loan to increase the project’s scope to take in to account the positive market outlook on account of redesign of the project to allow for flexibility and also to compensate for a planned Term Loan at the time of the last assessment in 1995, which the company did not avail. The unit at Samana was conceived and planned in a very restrictive legislative environment where there was severe limitation on capital investment as Rice Milling as an activity was reserved for small scale. In 1996, around the time when first IFC loan was approved, the activity of Rice Milling was de-reserved. The company started the Gurgaon unit to achieve higher levels of capacity, productivity, hygiene and other social and environmental standards since the existing unit at Samana provided very little scope for improvement.