Burkina Faso firm secures US$ 151mn loan to buy cotton

24 Jan '12

2 min read

Burkina Faso's largest cotton firm, Societe Burkinabe des Fibres Textiles (Sofitex), has secured a loan of 77 billion CFA francs (US$ 151 million) to fund its cotton purchases for the 2011-12 season, Chief Executive Officer of the firm Jean Paul Sawadogo said.

Mr. Sawadogo said loan obtained from 10 local lenders would facilitate speedy payment to cotton growers.

The amount to be taken on credit this season by Sofitex is a seven percent rise over the loans secured during last season, Roger Dah-Achinanon, Managing Director of Ecobank Transnational Inc. (ETI)'s Burkinabe unit, which was also among the banks that extended the loan, said.

Burkina Faso Government had announced in April last year that it would procure cotton from farmers at a price of 245 CFA francs per kg.

Sofitex has started procuring the crop from December 2011. Mr. Sawadogo said the firm's cotton-seed production for the 2011-12 season is expected to grow by five percent to 300,000 metric tons.

Mr. Dah-Achinanon revealed that Sofitex has already returned around 75 percent of its last season's loan. Coris Bank International, United Bank for Africa Plc (UBA)'s Banque Internationale du Burkina, Groupe Banque Atlantique, Banque Sahelo Saharienne pour l'Investissement et le Commerce, Bank of Africa Burkina Faso and Societe Generale SA's unit are the other lending partners, he informed.

Burkina Faso is the biggest competitor of Mali in terms of cotton production in the African region.

Fibre2fashion News Desk - India