Singapore agribusiness giant Olam International has sold its basmati rice milling business in India to Ebro Foods.

The Spanish food group has bought Taraori Rice Mills Private Limited, the holding company for Olam’s rice milling assets in India, for US$14.5m. The business, which comprises a rice mill located in Haryana, has a processing capacity of 18 tonnes of paddy per hour.

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Rajeev Raina, global head of Olam’s Rice business said the sale of the business will allow it to release working capital to “reinforce” its core supply chain and trading business in non-basmati rice from India and other origins for its conventional markets.

“India is an important sourcing origin for us,” Raina said. “While the basmati part of the business provided some sourcing synergies, the sales and distribution channel was distinct and separate from the non-basmati rice business. Furthermore, significant investments in branding were required to grow the franchise. Through this sale we are monetising more than the book value of fixed investments, as well as releasing working capital.”