Sara Cotton raises $6.4m for cotton farming in Ethiopia
Coimbatore-based start-up Sara Cotton Fibers today said it has raised USD 6.4 million to initiate cotton cultivation in Ethiopia with a view to meet growing demand for the natural fibre in India.
July 26, 2011 / 16:01 IST
Coimbatore-based start-up Sara Cotton Fibers today said it has raised USD 6.4 million to initiate cotton cultivation in Ethiopia with a view to meet growing demand for the natural fibre in India.
"The company has raised USD 6.4 million through a mix of equity and debt route to fund its overseas expansion plans in Ethiopia," Sara Cotton Fibers said in a statement.The funds will be used to execute the cotton farm project in Ethiopia. Initially, 2,500 acres of farm land will be brought under cultivation of certified organic cotton and this will be increased later to cover as much as 5 lakh acres in 5-7 years, it said."The company has raised USD 4.5 million debt from Development Bank of Ethiopia, while a combination of overseas and high net worth individuals (HNIs) have invested USD 1.9 million for a 14% stake in the project," the company's Chief Financial Officer Sundhar Rajan said.Chennai-based Kalpathi Group has also been roped in as a strategic investor with a 58% stake in the cotton farming project to be started shortly in Ethiopia, he added.Sara Cotton Founder CEO Mohammed Saleem said, "Ethiopia offers a very investor-friendly climate for corporates.Incentives for our expansion include a three-year tax holiday, duty-free machinery imports and duty-free import of spares up to 15% of the machinery value." The Ethiopian government recently identified cotton as a priority sector for the country, he added. Discover the latest Business News, Sensex, and Nifty updates. Obtain Personal Finance insights, tax queries, and expert opinions on Moneycontrol or download the Moneycontrol App to stay updated!
