Agricultural trader ETG raises Sh8bn for exports



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Kenya-based agricultural commodities trader Export Trading Group (ETG) is raising $80 million (Sh8 billion) to finance its exports of grains from and import of fertiliser to Africa.

The company is set to receive $40 million (Sh4 billion) in funding from the International Finance Corporation (IFC) and the balance is expected to come from London-based Standard Chartered Plc.

ETG buys and sells a wide range of commodities, including maize, pulses and fertiliser. It has operations in 40 countries where it buys, stores, processes and/or manufactures finished goods.

Trade finance facilitates global business by removing various obstacles including payment and supply risk.

“The proposed project involves the second renewal of the existing funded risk-sharing facility with Standard Chartered Bank for a trade finance facility of $80 million to support ETG agri-commodity trader’s export of cash and food grains, storage, and import of fertiliser in sub-Saharan Africa,” the IFC said in its investment disclosures.

“IFC’s investment amount will be up to $40 million,” the global financier added.

The proposed project will involve trade mainly in East, southern and West Africa. Standard Chartered’s trade risk distribution desk is managed from its Singapore hub.

The company is one of the world’s leading international banks with more than 1,000 branches, offices and outlets in 60 countries.

The project will support the purchase, storage and sales of agricultural commodities and fertiliser in sub-Saharan African countries such as Malawi, Benin, Kenya and Tanzania.

Commodities financed by the project are bought from smallholder farmers and sold to wholesalers, co-operatives, NGOs and governments in various low-income African countries and in the international market.

ETG was established in 1967 in Kenya and is active in over 25 African countries, as well as in India, China and South East Asia.

The company has additional trading and merchandising desks in Europe, the Americas and the Middle East.

The multinational employs more than 7,000 people globally. Its major shareholders are Ketan Patel, Mahesh Patel and Pradip Patel family trust and institutional investors Pembani Remgro (South Africa) and Mitsui & Co Ltd of Japan.

The IFC said the renewed trade finance facility for ETG would help connect farmers to value chains, among other benefits.

“The renewed facility is expected to continue having the following development impacts: support of commodity trade finance for importers/exporters in emerging markets.

Increased access to trade finance for critical commodities, especially in the agro-commodity sector in an emerging market,” the institution said.

“Improved market integration by facilitating intraregional and south-south trade for commodities and enhancing the connectivity of real sector firms into value chains.”


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