DHAKA, BANGLADESH – The Asian Development Bank (ADB) today signed an agreement to lend $25.1 million to Bangladesh’s largest food manufacturer, the PRAN group, to help the firm build three food manufacturing plants.
“The new plants will source as much raw material as possible from 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 rural areas, and agriculture remains their main source of employment and income.”
PRAN has set up Sylvan Agriculture Limited to build a liquid glucose plant in Olipur, 120 kilometers northeast of Dhaka, and a flourmill producing fortified flour and a frozen food processing plant, both in Danga, 30 kilometers east of Dhaka. The new plants are scheduled for completion by 2015. The three plants will cost $35.8 million to build. The Chowdhury family, PRAN’s controlling shareholders, will provide the balance.
The plants will directly employ around 1,000 workers, and provide indirect employment for about 50,000 farmers who will supply maize and wheat to the plants under a contract farming model. Sylvan has committed to ensuring at least 30% of its workforce is women.
The investment is ADB’s first private sector agribusiness loan since 1985 and ADB’s first private sector loan in Bangladesh since 2004. It 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. It is crucial to providing market linkages between farmers and food processing and export markets in the country.
Sylvan will have an annual production capacity of 45,000 tons of liquid glucose, 90,000 tons of flour and 180 million units of flour-based frozen foods. Annual sales are expected to exceed $50 million by 2016.
PRAN is the leading food and agribusiness company in Bangladesh, with $450 million sales including $70 million export sales. With 29,000 employees, it is one of the largest private sector employers in the country.