IFC To Invest $30M In Dunar Foods
Monday, April 4, 2011
International Finance Corporation (IFC) plans to invest $30 million through a mix of equity and debt in Karnal-headquartered Dunar Foods that is in the business of procurement, processing and supply of basmati rice. It will co-invest with another undisclosed private equity fund that is expected to bring in a separate $10 million for the Haryana-based, privately held rice company.
Dunar Foods owns two production facilities – one in Karnal (Haryana) and the other in Amritsar, Punjab (commissioned in March, 2010). The processing capacity of the Karnal facility is 26 tonne per hour (tph) while the Amritsar plant churns out 24 tph.
The company plans to pump in funds in order to expand its production capacity in Karnal from 26 tph to 50 tph during the next two years. It will also invest in additional silo capacity of 60,000 metric tonne and the rice husk-based power generation capacity of 3 MW in Karnal. Another new rice husk-based power plant of 2 MW will come up in Amritsar (in addition to the existing 1 MW capacity).
The total project cost is around $140 million including the capital expenditure for the expansion, as well as additional working capital requirements associated with increased sales. The company plans to raise up to $30 million in equity and fund the remaining project cost by internal cash flow and working capital debt.