AGI to Adopt Barter Program in Brazil

Canadian manufacturer Ag Growth International plans an aggressive expansion through acquisitions in Brazil after an overhaul of its first South American plant, which it bought last year, a senior executive said.

AGI spent $40 million to buy and modernize the factory in Sao Paulo state and plans to recover that investment in three to five years, said Wilfried Toth, head of operations in Brazil.

AGI wants to finance clients in Brazil through a barter program, which local producers now use for fertilizer and pesticides but not equipment. Under such a program, AGI finances its clients and receives grain as collateral until the debt with the equipment maker is paid.

Toth said tight credit from state banks had shrunk Brazil’s grain storage market by about 25 percent from its peak in the first three years of this decade, but it still was worth about 1.5 billion reais ($460 million) per year.

AGI is the latest foreign investor to be drawn to Brazil’s expanding agricultural frontiers and climate that offers two annual harvests.   Source: Reuters

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