The Asian Development Bank (ADB) has signed an agreement yesterday to lend $25.1 million to Pran Group to build three food manufacturing plants.

“The new plants will source as much raw material as possible from the local farmers, and this will help boost agricultural growth,” said Martin Lemoine, investment specialist in ADB's private sector operations department.

“The majority of Bangladesh's poor still live in the rural areas, and agriculture remains their main source of employment and income,” he added.

The plants, to be set up under Sylvan Agriculture Ltd, will produce liquid glucose, frozen food processing and fortified flour, and are scheduled to be complete by 2015.

The three plants will cost $35.8 million to build, with Pran's controlling shareholders providing the remaining $10.7 million.

The plants will directly employ around 1,000 workers, and provide indirect employment for about 50,000 farmers under a contract farming model; at least 30 percent of the workforce will be female.

The estimated annual production capacity from the plants will be: 45,000 tons of liquid glucose, 90,000 tons of flour and 180 million units of flour-based frozen foods. The annual sales are expected to exceed $50 million by 2016, the ADB said.

The investment, ADB's first private sector agribusiness loan since 1985 and first private sector loan in Bangladesh since 2004, is part of ADB's efforts to promote productivity and competitiveness in Bangladesh's agriculture and food processing sectors.

The project will help push the country's agribusiness sector up the food value chain, increase food exports and improve food security and nutrition in Bangladesh.

Pran is the country's leading food and agribusiness company, with sales of $450 million that includes $70 million from exports.

News: The Daily Star/Bangladesh/15-Nov-12