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IFC’s Largest Equity Investment in Agribusiness to Increase Global Food Supply 20.02.2009

Washington D.C., February 19, 2009—IFC, a member of the World Bank Group, is providing $75 million, its largest equity investment in agribusiness, to help set up a fund that will support farming and food production in emerging markets to increase the global food supply.

IFC has teamed up with Altima Partners LLP, which manages the $625 million Altima One World Agriculture Fund, to create a parallel vehicle that specifically targets emerging markets. The new fund, Altima One World Agriculture Development Fund, will invest in agricultural production land and world-class farm operators that will help increase economies of scale and improve farm productivity by implementing modern technology and best practices.

"Altima is honored to have been selected as a strategic partner by IFC," said Joseph Carvin, partner with Altima Partners LLP. "We are confident that our combined strengths will be a force for positive change in the agriculture sector and will benefit communities around the world." Carvin also noted that food security issues and the need to cultivate more land emphasize the importance of promoting best management practices for the agricultural sector.

High food prices and their impact on the poor continue to be a top concern for IFC and the World Bank. Although prices for soft commodities have been declining recently, they remain above historical highs and could likely rise again in today's volatile global economic climate. The financial crisis has negatively affected the availability of financing and has increased the cost of credit. A combination of declining soft commodity prices and increasing cost of credit creates lower incentives for farmers to plant, which could result in global production shortages.

IFC's response focuses on increasing food production by investing in productive farm land in countries with high potential for agriculture and improving productivity. By investing in the Altima fund, IFC is leveraging its resources to stimulate growth in agricultural production in emerging markets.

"Increasing agricultural productivity in a sustainable way is central to increasing global food production," said Oscar Chemerinski, IFC Director for Global Agribusiness. "Agribusiness private equity funds are just emerging as an asset class. We are glad to work with Altima Partners in creating new opportunities for emerging markets to expand their agribusiness sectors."

About IFC
IFC, a member of the World Bank Group, creates opportunity for people to escape poverty and improve their lives. We foster sustainable economic growth in developing countries by supporting private sector development, mobilizing private capital, and providing advisory and risk mitigation services to businesses and governments. Our new investments totaled $16.2 billion in fiscal 2008, a 34 percent increase over the previous year. For more information, visit www.ifc.org

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For investors: new entry
Novokahovskyi Lime-Sand Brick Plant

Purposes of company: Investments
Company description:

Market Overview:  Construction volume is increasing 20-25% annually, creating an increased demand for high quality façade bricks. The industrial capacity of façade bricks is estimated at 200 million bricks per year. In 2006, a construction boom is expected in southern Ukraine, where the plant is located. The product is used mainly by construction companies and private companies.

Project Overview:

  • Using KSE-400 (Germany)
  • Equipment supplier offers trainings for the buyer’s staff
  • Can produce 30 million bricks per year including high quality hollow façade bricks, ordinary bricks, molded bricks, white and colored bricks

Competitive Advantages:

  • Production of lime-sand bricks is considerably more energy efficient than the production of ceramic bricks. Moreover, the project envisions the reconstruction of one of the two pit-type 50-ton lime-burning kilns; using coal, automatic blending, loading, and burning will save on gas
  • Plant produces its own lime; a sand-pit is located close to the plant
  • No high quality lime-sand hollow bricks are produced in southern Ukraine
  • Due to the considerable decrease in the weight of the bricks, delivery and transportation becomes much easier; bricks can be transported by auto, railway (via the plant’s rail track), or by water (a river port is 8 km away)
    Investment Project Progress:  Market research has been conducted

Key Financials:

  • Total Investment - € 1.5 mln
  • Investment Needed - € 1.5 mln
  • Payoff period - 5 years

Branch: Construction materials
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