World Bank to Provide $145 Million in Financing to Engro Foods’ Buyer

The International Finance Corporation (IFC) will give $145 million worth of funding to the Dutch Dairy company Friesland Campina (one of the biggest dairy products producer on the planet) to acquire 51% of Engro Foods.

Engro Foods is one of Pakistan’s leading dairy processor and this acquisition is expected to boost the advancement of Pakistan’s dairy products sector.

Engro Foods

Engro Foods is a subsidiary of Engro Corporation, one of the largest industrial groups in Pakistan. The Group has a diverse business portfolio including operations in fertilizers, edibles, petrochemicals and energy.

Engro Foods Ltd. started operating in 2004 as a subsidiary of Engro Corporation Limited. Engro Foods produces and sells dairy items, juices, dessert, and solidified sweets. The organization’s focal business is in dairy products and milk.

Through Engro Foods’ milk gathering network combined with on-ranch technical guidance and training milk production and farming, the company has employed and improving the living standards of a huge number of individuals.

The International Finance Corporation (IFC)

The International Finance Corporation (IFC)  is an active member of the World Bank Group, which will be funding the Dutch dairy giant. These funding packages will be comprised of equity investments of $45 million and a senior loan of $100 million.

In July 2016, Engro settled on terms to sell 51% of the stakes in its subsidiary Engro Foods, to a Dutch dairy cooperative in a deal worth approximately $446 million.

“Nederlandse Financierings-Maatschappij voor Ontwikkelingslanden” which is a Dutch development bank, will also support the acquirement by providing up to $45 million.

Will Create Long Term Value for Everyone

As Roelof Joosten, chief executive officer at Royal Friesland Campina said,

Pakistan is a key emerging market and is backed by one of the world’s largest and fastest-growing middle classes, Together with Engro Foods, FrieslandCampina can contribute to food security, the more sustainable production of dairy, and raising living standards for Pakistani dairy farmers. I am convinced that this partnership will create long-term value for everyone.

FrieslandCampina will enlighten the small-hold farmers (who are supplying milk to Engro foods and majorly all the dairy processors in Pakistan) with its global experience and world class practices.

More than 270K distributors and 200K farmers are expected to benefit from the acquisition by the Dutch company. This acquisition will also generate more than 1,000 job openings in the dairy supply chain domain for Engro Foods.