25 June 2012
Standard Bank Group secures $250m facility for leading soft commodities trader ETG
Standard Bank Group announced the successful completion of a secured syndicated
loan of $250-million for Export Trading Group (ETG), one of Africa's largest soft
The funding will be used primarily to finance ETG's procurement of stock of agricultural
commodities from traders and farmers across several countries and to help it expand
further, particularly within west Africa which has been identified as a growth area
ETG's operations involve the production, processing, trading and distribution of
agricultural commodities primarily in Sub-Saharan Africa and Asia, and the group
is expected to increasingly play a leading role in ensuring regional and global
food security. Founded as an agricultural marketing company in Kenya in 1967, ETG
has grown into one of Africa's largest integrated agricultural supply chain managers.
Standard Bank Group was the mandated lead arranger for the ETG transaction.
Standard Bank Group has a long standing relationship with ETG and this is one of
several facilities that Standard Bank Group has arranged for ETG. In a previous
transaction, Standard Bank Group was mandated lead arranger for various trade finance
facilities of over $100-million to enable ETG to import and distribute soft commodities
within east and southern Africa and Asia.
Standard Bank Group's Head of Structured Trade Finance, Megan McDonald, says the
loan demonstrates the group's commitment to supporting growth in key commodity sectors
such as agriculture, which is under the spotlight because of growing concerns about
global food security.
She says the transaction with ETG attracted strong and broad-based interest from
several local and international finance institutions and demonstrates Standard Bank
Group's ability to facilitate the raising of finance for large cross-border trade
"As lead arranger we have again demonstrated the ability to mobilise funds from
local and international financial institutions with whom we enjoy strong relationships.
The combination of our experience in investment banking, on-the-ground presence
and local knowledge of African markets allow us to successfully execute structured
trade finance transactions.
"We believe that continued funding for the agriculture sector is needed to facilitate
investment in long-term sustainable solutions to the food security challenges. We
are delighted to assist ETG in their efforts to provide sustainable food supplies
and in their successful expansion into new markets both in Africa and Asia," says
Commenting on the loan facility, ETG Managing Director Ketan Patel says the transaction
will allow ETG to build capacity and enhance its leading positions in several core
product sectors as well as expand into new geographies.
"ETG is delighted with the successful completion of this financing, which will help
us to grow our soft commodities trade across the African continent. We thank Standard
Bank Group for their continued support," says Mr Patel.
"The funding will provide ETG with the flexibility required to gain significant
market share and increase profitability in the agri-commodities industry. Furthermore,
this type of facility will enable ETG to deliver stock at short notice to its off-takers,
while simplifying the flow from raw commodity inputs to final processed products,
thereby fast tracking turnaround times. It will ensure that ETG has the relevant
stock available for distribution all year round, which is crucial for ETG's competitiveness."
Ms McDonald says this transaction is also significant for Standard Bank Group as
it adds to its growing share of the overall trade finance market in Africa. She
says an important change in growing Standard Bank Group's share of the general trade
finance trade market in Africa is that global liquidity pressures have made the
cost of funding for Standard Bank Group much more competitive.
"Standard Bank Group's healthy balance sheet, depth of expertise and on-the ground
presence in key African commodity markets has enabled us to continue to increase
lending to transactions in key commodity sectors on the continent.
"As the largest bank in Africa, we expect to continue playing a leading role in
trade finance and strengthening trade not only within the continent, but between
African and other emerging markets."