Value chain investment
All sectors have their own dilemmas and challenges, but our experience with agriculture has taught us that it can be a particularly risky segment to invest in. Financing primary agriculture and livestock can bring additional volatility from a range of risks, including pricing, seasonality and disease. Therefore, FMO will be selective in choosing the right types of clients, while further developing our knowledge in the sector.
Because of the risk inherent in this sector, FMO takes a global value chain approach when investing in farming, processing and distribution - targeting bottlenecks and strengthening the weakest links. We aim to be a long-term partner to our clients, who each play a part in the agribusiness value chain. Agribusiness clients range from companies active in: seeds and fertilizers; primary production and farming; infrastructure; commodity and food processing and trade and distribution.
Also in 2011, FMO signed a memorandum of understanding with German and French development finance institutions DEG and Proparco for the creation of a joint initiative to finance the food supply chain. The aim is to develop a strategy on marketing our products jointly, building the market presence of all three institutions. Further steps will be taken in 2012 to define the steps we wish to undertake to achieve that aim.