Adecoagro has secured USD 100 million international credit for projects and investments in Argentina
It expects to double its milk production to 200 million litres per year in Argentina. The Wall Street listed firm also has assets in Brazil and Uruguay.
Adecoagro, Argentina’s largest milk producer, received a USD 100 million loans from the International Finance Corporation (IFC) weeks ago, which will be earmarked for investments in the local agri-food sector, more specifically aims to double its milk production to reach 200 million litres per year.
This is the second time the company has obtained funding from the IFC, in 2016 it obtained another credit of $50 million. At that time the money was used to make investments in the sugar and energy sector in Brazil and in the Argentine dairy industry.
Adecoagro is an undisputed leader in Argentina’s dairy business not only because of its current production levels – it has more than 850,000 cows that produce around 100 million litres of milk a year – but also owns two industrial plants that it bought some time ago from the SanCor cooperative. In this way, the firm is unique in the segment because it processes its own raw material, while other large companies such as Mastellone or Nestlé must be supplied in the domestic market for raw milk.
The company, which is listed on the NY Stock Exchange, has its fully diversified business with operations in Argentina (milk, peanuts, rice and grains), Brazil (sugar cane, energy and grains) and Uruguay (grains), in these three countries it also has a segment dedicated to the transformation and exploitation of land in partnership with third parties.
“Obtaining this funding is a very important achievement, especially in the face of the effects of the pandemic, and contributes to the continuity of its production processes in a responsible and safe environment,” they said from the firm.
Just Adecoagro is restructuring its ethanol business in Brazil because the demand for the product fell dramatically in the face of lower vehicle traffic on the streets. In this context, the firm is turning to sugar production and slowing its ethanol production levels from cane.
In this context, the same Mariano Bosch, when he presented last May the results of the first financial quarter of 2020, detailed:“As important as our flexibility is our constant focus on increasing operational efficiency and keeping our costs low. Being a low-cost producer is in our DNA, and now it’s more relevant than ever, allowing us to sell our production profit-making even under the current circumstances.”
So thanks to the credit of the International Finance Corporation (IFC), the agribusiness firm got the working capital necessary not only to not curb its investment plans but also to underpin its structure aimed at producing with high added value and at low costs.