IFC, a member of the World Bank Group, and the Global Agriculture and Food Security Program have announced a $3m investment in SMTP Group to expand the company’s poultry operations in Madagascar.

Oumar Seydi, IFC Director for Eastern and Southern Africa, said: “IFC and the Global Agriculture and Food Security program’s investment in SMTP supports the growth of a local company which will increase food supply, create jobs, support thousands of farmers in Madagascar.”

“By introducing international best practices, SMTP will help make Madagascar’s agribusiness sector globally competitive, which is vital for the country’s economic recovery,” he said.

IFC said that the financing will be issued in Malagasy Ariary, helping SMTP limit foreign currency risk.

SMTP Group is a conglomerate in Madagascar, with activities in agribusiness (including industrial bakery), plastics, packaging, woven polypropylene, construction and civil works, automobile dealership, real estate (residential and commercial).

Three of the SMTP Group’s subsidiaries, Agrifarm, Agrival and Mabel, will benefit from the investment.

The companies will use the funds to double the production of day-old chicks, increase supply of animal feed, and will set up a modern chicken slaughterhouse, which will supply over 15,000 tons of chicken meat per year.

SMTP’s expansion will also help farmers in Madagascar, who supply maize for animal feed production.

As the Group’s poultry operations grow, the number of farmers supplying maize and other inputs is expected to increase from 1,200 to 4,000.

SMTP will advise farmers on how to increase their productivity and revenues, providing them with hands-on assistance, fertilizers and agricultural inputs.

Poultry production is a way of life for many rural families in Madagascar. Nearly all poultry is grown in non-industrial, backyard operations, with little attention to health and safety standards.

As a result, Madagascar’s poultry sector is not competitive globally, given its lack of industrialization and scale.

IFC will advise SMTP on design of the new poultry farm and slaughterhouse, ensuring that the facilities meet the international health and sanitary standards required for meat exports.

Danil Ismael, Chairman of SMTP, said: “The investment will enable SMTP to expand its poultry operations despite the challenging economic environment in Madagascar. We are committed to work closely with IFC to adopt international best practices, so we can deliver high-quality food products to Malagasy consumers”.

Supporting agribusiness along the value chain is a cornerstone of IFC’s strategy in Africa.

Agriculture employs over half of Africa’s labor force, and has a strong impact on micro, small and medium-sized enterprises.