Target Information

FMO, the Dutch entrepreneurial development bank, has entered into a USD 75 million senior secured loan agreement with Ulusoy Un Sanayi ve Ticaret A.S., a prominent flour milling and agri-processing company in Türkiye. Established in 1969, Ulusoy Un has developed from a regional grain distributor to a vertically integrated agri-food enterprise, encompassing flour milling, commodity trading, warehousing, and branded consumer products. The organization operates five milling facilities across Türkiye, a pasta factory in Italy, and a trading subsidiary based in Switzerland, positioning itself as a significant contributor to both domestic and international food supply chains. As a listing company on the Turkish Stock Exchange, Ulusoy Un has consistently demonstrated resilience in navigating economic challenges, regulatory changes, and global supply chain disruptions.

Industry Overview in Türkiye

Türkiye is strategically important for FMO due to its status as a regional hub for agri-processing and trade. The country's food sector has demonstrated a remarkable export performance, particularly in flour and pasta, despite ongoing macroeconomic challenges. With a growing population and increasing urbanization, the demand for quality food products continues to rise, offering extensive opportunities for companies like Ulusoy Un to innovate and expand.

The Turkish agri-food industry benefits from a favorable agricultural climate and a well-developed infrastructure for production and distribution. The Turkish government has also implemented various policies to support the agri-food sector, aiming to enhance food security and encourage exports. With Türkiye being the second-largest exporter of pasta globally, the industry is poised for further growth as companies look to expand their product offerings and reach new markets.

Ulusoy Un's commitment to quality and sustainability positions it favorably amidst increasing competition. The company is actively investing in innovative technologies and practices to enhance efficiency and reduce environmental impact. These initiatives align with global trends towards sustainable agriculture, opening avenues for new investments and partnerships.

Furthermore, the increasing global demand for high-protein staple foods provides a significant opportunity for Türkiye's food producers as they look to export to underserved regions, particularly in Sub-Saharan Africa and South America. The ongoing developments in the agri-food sector indicate a robust future for companies committed to sustainable growth and expansion.

Rationale Behind the Deal

The financing provided by FMO is intended to support Ulusoy Un as it embarks on significant expansion efforts, which include the construction of a state-of-the-art pasta facility and the enhancement of storage infrastructure in proximity to its milling operations in Samsun, a key port city on the Black Sea. Set to begin operations in 2026, the new facility aims to allocate 60% of its production for export, thereby bolstering Türkiye’s position as a leading pasta exporter.

This financial support not only refines Ulusoy Un’s production capabilities but also aligns with FMO’s strategic focus on fostering innovation and sustainability within emerging markets, ensuring that local companies can contribute meaningfully to food security and economic resilience globally.

Investor Information

FMO is the Dutch development bank dedicated to advancing private sector development in emerging markets. They provide financing and support to projects that align with various Sustainable Development Goals (SDGs), promoting economic growth, job creation, and environmental sustainability. With this investment, FMO aims to facilitate sustainable food production practices and the development of essential infrastructures consistent with their mission to combat global challenges such as hunger and climate change. The financial partnership with Ulusoy Un will further strengthen FMO’s portfolio of investments within the agri-food sector, exemplifying their commitment to impactful economic development.

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From an expert perspective, this investment by FMO in Ulusoy Un appears to be a prudent decision. The agri-food sector in Türkiye continues to showcase resilience and growth potential, especially as it navigates global supply chains and increasing food demand. By supporting Ulusoy Un's expansion into pasta production, FMO is not only investing in a well-established company but also in the broader prospects of the Turkish food sector.

Moreover, the alignment of Ulusoy Un’s initiatives with several Sustainable Development Goals signifies a commitment to both economic growth and social responsibility. This positions the company advantageously in a market increasingly favoring sustainability and ethical practices.

The substantial focus on export-oriented production further underscores the strategic merits of this investment. With the company targeting underserved markets in Sub-Saharan Africa and South America, there are significant growth opportunities ahead that could yield promising returns for FMO and contribute positively to global food security.

In conclusion, the collaboration between FMO and Ulusoy Un not only stands as a testament to innovative growth strategies within the agri-food industry but also reflects a strong investment opportunity grounded in sustainability and long-term vision. This partnership is likely to enhance both the investor's portfolio and the operational capabilities of Ulusoy Un, ensuring substantial contributions to global food supply chains.

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