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CDC commits USD10m to India Agri Business Fund

CDC Group, the UK’s development finance institution, is committing USD10m to Rabo Equity Advisor’s India Agri Business Fund, CDC’s first investment under its new investment policy.

CDC Group, the UK’s development finance institution, is committing USD10m to Rabo Equity Advisor’s India Agri Business Fund, CDC’s first investment under its new investment policy.
 
The fund will invest in middle market companies in the agribusiness sector across the entire food value chain in India – farming, logistics, production and marketing.

The fund has already made its first investment in Sri Biotech Laboratories, a company which produces and sells organic agricultural products that improve and protect crop yields.

The fund expects to make between ten and 15 further investments over a four year period ranging in size from USD3m to a maximum of USD20m.
 
Since its reorganisation in 2004, CDC has committed over USD1.5bn to funds in South Asia. The new investment policy, which came into effect on 1 January 2009, means CDC will be more focused on investing in the world’s poorest countries, with 75 per cent of new investments going to countries, like India, with an annual gross national income per head of less than USD905. 
 
Anubha Shrivastava, CDC’s managing director, Asia, says: ‘Although currently underdeveloped, agribusiness in India is a sector which has enormous potential. The India Agri Business Fund will open up new opportunities for India’s food companies, which in turn will be a great stimulant for economic growth through new jobs, improved infrastructure and economies of scale.
 
‘Indian agribusiness companies, in contrast to their international counterparts, tend to be small and restricted in their product ranges, which leads to high unit cost of production and low global competitiveness. The Indian government’s attempts to build food parks, upgrade institutional infrastructure and enable direct sourcing by processes from farmers are designed to address some of these bottlenecks, but private investment will help bridge the gaps in the sector.’
 
The fund will be managed by Rabo Equity Advisor’s New Delhi based team.

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