Karuturi to Borrow From Sovereign Fund After First Ethiopia Crop
By William Davison
(Bloomberg) – Karuturi Global Ltd. (KARG), the world’s largest rose grower, said it will borrow more than $100 million from a sovereign wealth fund to invest in farming in East Africa after selling its first produce from a plantation in Ethiopia.
The company, based in Bangalore, India, produced 21,000 metric tons of corn in the last quarter of 2012 that sold for about $6.5 million in Ethiopia, Managing Director Sai Ramakrishna Karuturi said in a phone interview on March 27. The harvest, grown on its plantation in western Ethiopia, showed the project was “not a disaster” after floods destroyed a 60,000- ton corn crop in September 2011, he said.
The deal with the unidentified fund comes after development banks declined to provide assistance because of “unfair” criticism of commercial farming by advocacy groups, Karaturi said. “Hundreds of millions” of dollars will be advanced to the company by the end of April and invested in Ethiopian projects as well as Kenyan flower farms, he said.
Ethiopia’s land-commercialization drive has been attacked by groups including the California-based Oakland Institute, which says the farms forcibly displace people and will increase poverty. Karuturi leased 100,000 hectares (247,105 acres) in the Gambella region from Ethiopia’s government in November 2010 for 2 million Ethiopian birr ($108,151) a year
Horizon Plantations, majority owned by Saudi billionaire Mohamed al-Amoudi, leased a 20,000-hectare plot in the western Benishangul-Gumuz region in September to grow groundnuts to produce cooking oil. Read More