WASHINGTON, D.C., November 4, 1998 --- The International Finance Corporation today approved a US$12 million loan to Argentina's third largest dairy cooperative, Association Union Tamberos Cooperativa Ltd. (AUTCL), to support the development and modernization of the dairy sector.
The project will help secure AUCTL's long term milk supply – processed by its subsidiary, MILKAUT S.A. – by helping its farmers to boost productivity, reduce their production costs and improve handling. Loans averaging $40,000 will go to some 300 dairy farmers in the cooperative to finance pasture improvements and buy milking and cooling equipment.
Financing to individual farmers will be channeled through Banco Roberts, one of the largest commercial banks in Argentina, which will act as administrative agent.
Tei Mante, IFC Director for Agribusiness said the project will make the farmers in the cooperative more competitive, substantially increase their annual net income, and improve the quality of milk. The project also demonstrates IFC's commitment to support Argentine's agricultural sector, which accounts for 60 percent of the country's exports.
AUTCL was established in 1925 by farmers of Swiss and Italian origin. Membership of the cooperative is currently 1,237 dairy farmers, 90 percent of whom are located in the province of Santa Fe.
This is IFC's second investment in AUTCL; in 1995, MILKAUT received $44.5 million in IFC financing to upgrade and expand its industrial capacity. As of September 30, 1998, IFC's investment portfolio in Argentina amounted to $990.7 million, accounting for 9.1 percent of IFC's net portfolio. In the fiscal year ending June 1998, IFC invested $170 million in seven projects in Argentina, ranging from agribusiness and manufacturing to education and health.
IFC, part of the World Bank Group, fosters economic growth in the developing world by financing private sector investments, mobilizing capital in the international financial markets, and providing technical assistance and advice to governments and businesses.
