Environmental & Social Review Summary
Project Number
31999
Company Name
COMERCIAL CITY FRESKO, S. DE R.L. DE C.V.
Date ESRS Disclosed
Feb 17, 2012
Country
Mexico
Region
Latin America and the Caribbean
Last Updated Date
Feb 26, 2017
Environmental Category
B - Limited
Status
Completed
Previous Events
Approved : Sep 21, 2010
Signed : May 9, 2012
Invested : May 10, 2012
Sector
Retail (Including Supermarkets, Grocery Stores, etc.)
Industry
Manufacturing
Department
Gbl Ind, Manufact, Agribus & Services
Project Description
This project is proposed under the Global Trade Supplier Finance program (“GTSF” or the “Program”) approved by the IFC Board in September 2010. (Original Project Link #28723).
Controladora Comercial Mexicana (“CCM” or “Comerci” or the “Company”) is the fourth largest retailer in Mexico with 227 retail stores, 74 restaurants and 5 distribution centers under operation as of December 31 2011. It is listed on the Mexican Stock Exchange (BMV) and, as of January 20 2012, had a market capitalization of approx. US$2.1 billion. It has 4 business lines (retail, restaurants, real estate management, and a 50-50 JV with Costco) with retail being the largest one as it represents 75% of its revenues (mainly food). Comerci has supplier finance (SF) program in place with NAFIN providing SF to 700 of its suppliers, the large majority of which are small of medium enterprises (SMEs).
The Project will establish a Supplier Finance (“SF”) program and make financing available to the suppliers of Commercial Controladora Mexicana (“Comerci” or “CCM” or the “Company”), through the discounting of receivables of the suppliers payable by Comerci. The SF program will have an IFC-funded, uncommitted credit line of US$100mn to be split in: i) US$85 million equivalent denominated in Mexican Pesos (“MXN”) and targeted to CCM’s Mexican SME suppliers and ii) US$15 million denominated in USD and targeted to CCM’s foreign suppliers based in emerging markets. The program will be implemented through PrimeRevenue, a Supply Chain Finance platform, and its local re-seller, E-Factor Network (“EFN”), and it is expected to reach 700 Suppliers the large majority of which will be SMEs.
Controladora Comercial Mexicana (“CCM” or “Comerci” or the “Company”) is the fourth largest retailer in Mexico with 227 retail stores, 74 restaurants and 5 distribution centers under operation as of December 31 2011. It is listed on the Mexican Stock Exchange (BMV) and, as of January 20 2012, had a market capitalization of approx. US$2.1 billion. It has 4 business lines (retail, restaurants, real estate management, and a 50-50 JV with Costco) with retail being the largest one as it represents 75% of its revenues (mainly food). Comerci has supplier finance (SF) program in place with NAFIN providing SF to 700 of its suppliers, the large majority of which are small of medium enterprises (SMEs).
The Project will establish a Supplier Finance (“SF”) program and make financing available to the suppliers of Commercial Controladora Mexicana (“Comerci” or “CCM” or the “Company”), through the discounting of receivables of the suppliers payable by Comerci. The SF program will have an IFC-funded, uncommitted credit line of US$100mn to be split in: i) US$85 million equivalent denominated in Mexican Pesos (“MXN”) and targeted to CCM’s Mexican SME suppliers and ii) US$15 million denominated in USD and targeted to CCM’s foreign suppliers based in emerging markets. The program will be implemented through PrimeRevenue, a Supply Chain Finance platform, and its local re-seller, E-Factor Network (“EFN”), and it is expected to reach 700 Suppliers the large majority of which will be SMEs.
Overview of IFC's Scope of Review
IFC reviewed CCM’s information publicly available including the current Company structure, Comerci’s 2010 corporate social responsibility (CSR) and Sustainability Report and supplemental information provided by the Company’s Deputy Procurement Director, who acts as CSR and Sustainability lead for Comerci.
Of CCM’s business lines Tiendas Comercial Mexicana represents 75% of its revenues, and similar percentage of its suppliers, which mainly involve food companies, but also home goods, apparel and footwear manufacturers. Potential adverse E&S impacts of the GTSF project arise at the level of the Suppliers. All Performance Standards are applicable to operations of potential suppliers to be supported by the Project.
In supplier financing programs of this nature, IFC assesses environmental and social (E&S) risk at Suppliers to Buyers (such as Comerci in this proposed transaction) by assessing the Buyers’ systems for management of E&S performance of their Suppliers. Therefore the Buyer (Comerci) assessment reported in this Environmental and Social Review Summary considers the application by Comerci of PS1 Social and Environmental Assessment and Management Systems as described below.
Of CCM’s business lines Tiendas Comercial Mexicana represents 75% of its revenues, and similar percentage of its suppliers, which mainly involve food companies, but also home goods, apparel and footwear manufacturers. Potential adverse E&S impacts of the GTSF project arise at the level of the Suppliers. All Performance Standards are applicable to operations of potential suppliers to be supported by the Project.
In supplier financing programs of this nature, IFC assesses environmental and social (E&S) risk at Suppliers to Buyers (such as Comerci in this proposed transaction) by assessing the Buyers’ systems for management of E&S performance of their Suppliers. Therefore the Buyer (Comerci) assessment reported in this Environmental and Social Review Summary considers the application by Comerci of PS1 Social and Environmental Assessment and Management Systems as described below.
E & S Project Categorization and Applicable Standard
Environmental and Social Mitigation Measures
Stakeholder Engagement
Related SII
