A new investment will help expand production of sustainable cotton in Brazil while reducing environmental impacts, according to IFC.

 

IFC’s $209.5 million package loan to Agropecuária Maggi Ltda., a member of AMAGGI (largest Brazilian grain and fibre company) and a Brazilian agricultural producer leader in social and environmental practices, aims to support a vital sector of the nation’s economy, promote sustainability as a business driver, and accelerate Brazil’s economic recovery.

 

The financing package consists of $100 million from IFC’s own account, the mobilization of $70 million from Rabobank and Banco Santander S.A, and $39.5 million from IFC’s Managed Co-Lending Portfolio Program (MCPP). The loan will allow the company to expand its sustainable cotton production by converting 37,500 hectares of already cultivated land from maize to cotton, as well as expand cotton processing capacity in the farms, and improve overall productivity through investments in logistics assets and protection and treatment inputs for existing cotton farms. The expansion and improvement of the cotton culture will be in Tanguro, Itamarati, Água Quente and Tucunaré farms, located at Mato Grosso (MT) state. 

 

The project will increase production of Better Cotton Initiative (BCI) certified cotton, supporting ongoing multi-stakeholder efforts to transition global cotton markets into a path of sustainability. The BCI is a global initiative and the world’s largest cotton sustainability program. Members of the BCI need to commit to a number of key principles, which include fair labour conditions for those involved in the production process, efficient water use in the cotton crop cycle and minimizing potential harmful impact of crop protection practices, among others.

 

“In recent years, cotton has become increasingly relevant at AMAGGI, which has invested heavily in sustainable management, socio-environmental certifications and 100% traceability of production. The financing from such recognized institutions - IFC, Rabobank and Santander - confirms that we are on the right path to meet the demands of the international market," said Judiney Carvalho, AMAGGI's executive president.

 

“One of IFC’s strategic priorities in Brazil is reconciling the nation’s economic growth and sustainability challenges. In alignment, IFC’s investment will help support Agropecuária Maggi’s growth while demonstrating the viability of sustainable cotton production. We are confident that this will encourage other cotton producers to adopt improved production practices, strengthening the sector’s competitiveness and supporting the cotton sustainability agenda globally,” said Carlos Leiria Pinto, IFC’s Country Manager for Brazil.

 

IFC’s project with Agropecuária Maggi aims to consolidate the company’s position as a relevant and competitive producer of sustainable cotton globally, as well as incentivize other producers to adopt better production practices. In addition, the AMAGGI Cotton Traceability and Sustainability (ACTS) program will ensure that the company's entire cotton production be traceable from origin to final destination.

 

With only 22 percent of the cotton commercialized globally being BCI-certified, there is significant potential to increase the participation of sustainable cotton. Brazil, given its comparative advantages for cotton production and control over the supply chain, is placed in a unique position to help addressing this global challenge.—TradeArabia News Service