Adecoagro obtained international credit of US $ 100 million and plans investments in Argentina

eFarm News | 27 July 2020

Adecoagro obtained international credit of US $ 100 million and plans investments in Argentina
The firm Adecoagro, the largest producer of raw milk in Argentina, received a loan of US $ 100 million weeks ago from the International Finance Corporation (IFC), which will be used to make investments in the local agri-food sector, more specifically aims to double its milk production to reach 200 million liters a year.
This is the second time that the company has obtained financing from the IFC, in 2016 it obtained another loan of US $ 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 the undisputed leader in the dairy business in Argentina not only for its current production levels – it has more than 11,000 milking cows that produce around 100 million liters of milk per year – but it also owns two industrial plants that He bought a long time ago from the SanCor cooperative. In this way, the firm is unique in the segment because it processes its own raw materials, while other large companies such as Mastellone or Nestlé must source raw milk from the domestic market.
The company, which is listed on the NY Stock Exchange, has a 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 also have a segment dedicated to land transformation and exploitation in association with third parties.
“Obtaining this financing 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 detailed from the firm.
Adecoagro is precisely restructuring its ethanol business in Brazil because demand for the product fell drastically due to the reduced circulation of vehicles on the streets. In this framework, the firm is turning to the production of sugar and slowing down its production levels of ethanol from cane.
In this context, Mariano Bosch himself, 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 is more relevant than ever, allowing us to sell our production at a profit even under current circumstances. ”
Thus, thanks to the credit from the International Finance Corporation (IFC), the agro-industrial firm obtained the necessary working capital not only not to stop its investment plans but also to shore up its structure aimed at producing with high added value and low costs.
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