MANILA, PHILIPPINES – One of India’s leading spice producers, Akay Flavours & Aromatics, will receive Asian Development Bank (ADB) assistance of $16.5 million to expand its business, invest in climate-resilient farming technologies, and open up income opportunities for thousands of poor farmers in India and Cambodia.

Akay produces high-value spice-based ingredients used in the food industry globally. It currently operates five processing plants in India and manages a model farm in Cambodia.

“ADB’s assistance will help Akay boost production and exports, with substantial downstream benefits for low income farmers,” said Martin Lemoine, Senior Investment Specialist at ADB “Akay has been working with contract farmers in India for the past 10 years, providing technical assistance and guaranteed offtake. ADB’s project will help increase the number of smallholder farmers benefiting from Akay’s relationship from 3,000 today to more than 8,000 by 2018”.

India is the world’s leading producer, consumer, and exporter of spices. Spice production however is dominated by smallholder farmers. As a result, scale, quality and reliability issues limit the industry’s export potential. Hence, there is a need for processing companies like Akay to engage directly with farmers to secure procurement of raw materials.

In India, the project will help Akay finance working capital for a new steam sterilization plant, expand research and development of spice products with health benefits, and develop a processing plant and marketing and distribution network for seasoning products.

In Cambodia, the project will support investment in organic spice farming using drip irrigation and rainwater harvesting on Akay’s model farm and in a new processing plant.

“Through its 700-hectare model farm in the Battambang province, Akay will be transferring spice cultivation best practices from India to Cambodia, and smallholder farmers from the region will have an opportunity to learn spice farming techniques before becoming contract farmers for Akay,” said Shuji Hashizume, Investment Specialist at ADB. The project is ADB’s first private sector project incorporating climate change adaptation co-benefits from drip irrigation systems and rainwater harvesting.

A credit facility will also be established to provide loans to contract farmers in Cambodia and help them adopt climate resilient farming practices. This component of the project is being supported by an ADB administered loan of $5 million from the Pilot Program for Climate Resilience, part of the $7 billion global Climate Investment Funds.

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