PS 4 – Community Health, Safety and Security – not applicable. The project entails construction and operation of a juice plant adjacent to the dairy plant and located on the Cairo-Alexandria Desert Road well away from any direct contact with communities.

PS5 - Land Acquisition and Involuntary Resettlement – not applicable. Expansion of the existing production facility will take place within the same industrial polygon in use for existing operations. The land was purchased previously from the Government of Egypt in accordance with Egyptian national laws and regulations.

PS6: Biodiversity Conservation and Sustainable Natural Resources Management - not applicable. The land used for expansion of the plant is a highly disturbed industrial polygon situated near the Cairo-Alexandria road and associated land uses that has been used for industrial operations for many years.

PS7: Indigenous Peoples – not applicable. The land used for expansion of the plant is a highly disturbed industrial polygon used for industrial operations. 

This proposed investment is expected to have limited environmental and social impacts that are anticipated to be few in number and generally site-specific. Highlighted impacts can be avoided or mitigated by adhering to recognized performance standards, procedures, guidelines and design criteria as described in the following sections. Thus, this is a Category B project in accordance with IFC’s Environmental and Social Sustainability Policy. The project is designed to avoid, minimize and manage E&S risks and impacts of the Company’s operations in compliance with Egyptian legal and regulatory requirements, IFC’s Performance Standards (PSs) and applicable World Bank Group (WBG) General and sector-specific Environmental, Health and Safety (EHS) Guidelines including Dairy Processing, Annual Crop Production and Food and Beverage Processing).  

Key E and S issues associated with this investment include the following; 

Environmental and Social Policies. As a joint venture between Almarai and PepsiCo, Beyti has adopted and then adapted the core E&S policies of both companies. PepsiCo’s environmental policies as stated in its GRI 2015 Report include; working to achieve positive water impacts; achieve lower carbon emissions; advance sustainable sourcing; and reduce and eliminate waste. Core social policies of PepsiCo include; advancing respect for human rights; support diversity and women’s advancement; and spur prosperity in communities where the company works.

Almarai’s mission as stated by the company is to, provide a standard of Health, Safety and Security that increases our awareness and preparedness to maintain a safe and secure working environment for our employees, clients and assets. Almarai states that it is committed to its food safety and quality policy to enhance its competitive advantage by applying the highest quality and regulatory standards to deliver safe products to satisfy consumers’ needs. Almarai also defines the Sustainability of its operations based on 3 pillars; financial, environmental, and social sustainability. In terms of environmental sustainability, Almarai identifies ‘access to water’ for its farms as a key environmental challenge, especially given Saudi Arabia water scarcity context and the government regulations to phase out reliance on the Kingdom’s dwindling water supplies (Almarai 2015 Annual Report, pp 44).

Parallel to both JV partner’s core E&S policies Beyti’s environmental, food quality and safety policies and procedures are updated annually, coded and announced to staff on a regular basis. In addition, Beyti has developed a Human Resources policy, and, a non-discrimination policy. Social policies also focus primarily on engaging with communities where the company operates. Corporate social responsibility policies are centered on education, training and professional development of its staff.  

Consistent with the requirements of ESAP item No. 1 Beyti will prepare and provide a management-approved Environmental and Social Policy defining E and S objectives and principles that guide all operations to achieve sound E&S performance. The policy will describe the framework for environmental and social assessment for future expansions and activities and management processes for current operations, and to specify that business activities will comply with applicable laws and regulations where it operates, including those laws implementing obligations under international law. 

Environmental and Social Assessment and Management System/Risks and Impacts Identification. Beyti’s current operations draw from the following Egyptian regulations to determine the universe of compliance requirements for food manufacturing activities; (i) Egyptian local regulations promulgated by the Egyptian organization for standardization (EOS); (ii) Packaging requirements related to Egyptian food laws and ministerial decrees and decisions for food safety; (iii) Raw material approvals following ministry of health audits, in addition to health certificates issued by the ministry of health for each product; (iv) Audits undertaken by the ministry of supply and compliance to all their requirements.  In addition, in 2002, the existing facility received an approval from the Egyptian Environmental Affairs Agency (EEAA) in relation to the previously submitted environmental impact assessment (EIA). Terms and conditions of this approval included the following requirements: the need to maintain noise levels in line with Egyptian environmental laws; to limit air pollution levels to acceptable levels; ensure health and safety in the workplace; ensure ventilation of the facility and avoidance of bad smells; ensure proper treatment of wastewater in line with legal standards; receive approval of civil defense and firefighting agencies; and provide safe disposal of waste resulting from the operation.

Beyti is also certified to the following internationally-recognized management systems; ISO 14001: 2004 which establishes and maintains an Environmental Management System for  Manufacturing and sales of UHT milk, flavored milk, whipping and cooking cream, juice, plain and flavored yoghurt, probiotic plain and flavored drinking yoghurt, butter and ghee; ISO 22000 : 2005 which establishes and maintains a Food Safety Management System for Manufacturing of UHT milk, flavored milk, cream, yoghurt, butter and juices; OHSAS 18001 : 2007 which establishes and maintains an Occupational Health and Safety Management System for Manufacturing and sales of UHT milk, flavored milk, whipping and cooking cream, juice, plain and flavored yoghurt, probiotic plain and flavored drinking yoghurt, butter and ghee; and lastly, ISO  9001:2008 which establishes and maintains a Quality Management System for Manufacturing and sales of the same line of products.

For the existing facility in Egypt, audits for the above management systems take place four (4) times a year. Two of these audits are announced, and two are unannounced. The audit reports by TUV for 2016 was revised as part of this appraisal; it included a number of identified opportunities for improvements as well as positive aspects in management systems. Examples of these include risk assessment and evaluation, management review, and competence training and awareness.

The combination of regulatory requirements and voluntary and credible certified management systems as described above provides IFC with assurance that Beyti identifies, assesses and manages the risks and impacts associated with its current operations in a manner consistent with the requirements of PS1. 

For the new Beyti/Tropicana juice facility currently under construction, and in accordance with Egyptian environmental laws and regulations, an Environmental and Social Impact Assessment (ESIA) was finalized and submitted to the Egyptian Environmental Affairs Agency (EEAA) in October 2016. The study was contracted to an external local consultancy firm. The EIA identified the new juice factory as a low risk project with similar environmental issues as those identified for the existing plant and described above. To date, given the status of the project, Beyti has not received the formal approval for its EIA nor the required permits and licenses from the Government of Egypt (GoE) to operate, including its Business License, and its certificate of competence for food manufacturing organization from the Food Medicine and Health Care Administration and Control Authority of Egypt.  As required by ESAP item # 2, upon receipt from the authorities, Beyti will provide all of these documents to IFC for review. 

Going forward, Beyti will ensure that its management systems, as described above and in place for current operations, will be put in place at the new facility and will, in total, be responsive to the nine (9) mandatory elements of an ESMS as defined in Performance Standard 1.  This is addressed in ESAP item #3.

Supply Chain Risk Assessment and Management. The quality department of Beyti creates a score sheet for each supplier updated on a semi-annual basis, to ensure quality, safety, and compliance are maintained across its supply chain.

For milk supplies, Beyti depends on 28 suppliers with a farm size ranging from 100 to 10,000 cows (Dina Farms); 80% of milk supply is estimated to be provided by large farms, and 20% by small farms. Each supplier is pre-approved according to PepsiCo supply chain requirements and a list of pre-approved list of suppliers is updated frequently. Supplier evaluation elements include animal welfare, hygiene, and safety for driving tractors used for transport of field mixing wagons. Production is estimated to be 33 liters/cow. Average milk production is ~30 liters/cow with milking three (3) times/day. Days in Milk production is ~180 days, depending on seasonality. Peak production is estimated at 55-60 liters/day. The lowest production ~26-27 liters/day occurs during June, July, and August due to heat stress. Manure is collected and dried then distributed on agricultural land every three (3) months.   

Beyti is at various stages with regards to three main elements to overcome FX impacts for their milk production: (i) localize animal feed; (ii) impact quality composition of milk without compromising the micro-biology quality of the milk; (iii) establish their own farms for animal feed production and/or merge and consolidate existing farms using an integrated approach. This last initiative is still at the conceptual stage. Should it develop further, the company will first inform IFC of its intentions and use its PS1-compliant management system to fully identify and assess the risks and impacts of such an endeavor.

For its juice concentrate supplies, Beyti outsources locally the juice concentrate for orange, guava, and mango. Beyti imports apple, pineapple, and mango from Colombia. The company audits its juice concentrate suppliers and has stringent procedures for tracing back the production and conducting an analysis of certificate shipments for fruits from imported concentrate manufacturers including pesticides and chemicals.

Management Programs/Organizational Capacity and Competence. Beyti’s organization chart shows the structure and capacity of the team responsible for both existing health and safety, food safety and environmental management systems within the plant and the anticipated structure of the new juice plant team who will ensure similar systems are put in place at the new plant. Similarly, the Human Resources’ organization chart illustrates both headquarters and plant staff along with a summary of the experience and qualifications of key members of EHS structure at the plant. Current initiatives related to ensuring ongoing competence of these responsible individuals include an annual training plan for plant personnel that has been developed using the risk assessments underpinning the above management systems to identify hazards in the plant and prescribe measures to avoid, minimize or mitigate them. 

Emergency Preparedness and Response – The plant plans for emergencies by conducting preparatory drills, and includes a procedure to review previously conducted drills along with their outcomes and identification of needed corrective measures. Potential EHS incidents that could result in emergencies have been identified at all Beyti operations through the EIA preparation process, including severe weather/natural disaster (e.g. flood), disruption to building services (e.g. power outage and water main break), civil disturbances/demonstrations, infectious disease outbreak, serious criminal activities, etc. The Emergency Preparedness and Response Plan has been reviewed and approved by local authorities and fire department in Beheira Governorate where the facility is located; it includes the roles and the responsibilities of staff and management at the plant in dealing with an emergency situation in different parts of the facility, such as outlining the roles of employees who have received firefighting training, as well as technicians and other emergency response team members.

Monitoring and Review.  IFC’s review included an evaluation of sample weekly inspection reports; quarterly internal inspections reports including food safety; quarterly Arab International Bank (AIB) reports; Annual external audit reports (TUV); Pre-treatment requirements (effluent treatment as per Holding Company for Water and Wastewater in Beheira); air emissions monitoring (associated with the boilers); and senior management review including minutes of both ISO and OSHAS management systems. Permits that are required by the local municipality include those related to water treatment and release of effluent into the Al Nasr drainage canal (Km8). These local governmental authorities regularly take samples to check compliance with required environmental standards; IFC reviewed reports that showed necessary compliance, with the exception of some discharges to the agricultural canal (see details below in the section on PS 3). As specified in the EIA for the new plant, and in line with existing practices at current operations, Beyti shall issue a monthly report indicating Effluent Treatment Plant Metrics for daily operations for PH, TDS, and COD (mg/L).

See relevant sections below for more details regarding monitoring and their demonstration of compliance to the applicable rules, regulations and requirements. Lastly, senior management are engaged in reviewing the performance of the management systems as per the requirements of the above-mentioned certified systems. Such reviews include consideration of corrective action as needed and provision of resources to ensure the systems are fully implemented and effective for the following year.

Human Resource Policy and Management. In total, Beyti’s workforce is estimated to be 3,400 employees consisting of ~920 factory-based employees, ~1,800 sales personnel, with the remaining ~640 employed in management and administration roles. In addition, the company hires seasonal staff when needed to meet its labor needs, estimated at around 640 employees.  Beyti complies with Egyptian Labor Law, as well as Almarai corporate HR policies according to the HR Policy & Procedures Manual. The HR manual encompass the following provisions: term of employment and recruitment, training and development, performance management, promotion, transfer, demotion and separation, remuneration, benefits and other assistance schemes, working hours, leave, disciplinary code, grievance mechanism, employee relations, and safe working conditions. The policy/manual is available in both Arabic and English and is provided to all workers during the induction session.

Professional training and career development is a key HR objective. The company offers technical certificates for its employees as well as executive programs at London Business School. Medical insurance and car allowances are also amongst the benefits provided by the company. Beyti has a non-discrimination policy, taking into consideration the gender balance when hiring. Female employment is mainly concentrated in administrative and management jobs, with very limited occupation in operational functions either in the production plants or the field sales teams. The company also ensures it satisfies the legal quota of employing 5% of its workforce from individuals with special needs. Such jobs include accountants, cashiers, and other accessible jobs.

Grievance Mechanism. A grievance email account exists and is directed towards the HR Director and CEO to handle complaints in a confidential manner. Confidential grievances can be also placed using an anonymous email. Typical examples of previously filed complaints include differences of opinion regarding performance ratings between employees and managers.

Workers organizations. Collective bargaining emerged after the 2011 revolution. No significant issues have been highlighted to be addressed by the workers’ organizations nor have there been any reports make of conflict between employees and management.  

Occupational Health and Safety. Beyti’s Plant Safety Manager has the responsibility for matters of worker health and safety. According to the Safety Organization chart, his team is comprised of twelve (12) personnel as follows; Two (2) plant safety supervisors, five (5) plant safety officers, three (3) first aid officers, one (1) safety systems supervisor, and two (2) projects safety supervisors.

For the new juice facility, the same Plant Safety Manager will be in charge of plant safety, and his team will include additional fourteen (14) new staff members: Two (2) plant safety supervisors, five (5) plant safety officers, three (3) first aid officers, one (1) plant safety supervisor, and one (1) civil defense supervisor with two (2) officers.

All safety policies and procedures are updated, coded and announced to staff. All hazards and risks inherent in all premises are assessed and controlled according to a general risk assessment that includes all the required control measures.

In order to manage or mitigate risks, all high risk activities carried out within the premises are controlled by a safe system of work and a license to operate. Beyti provides the appropriate personal protective equipment (PPE) to its employees after engineering controls have been exhausted to eliminate or reduce workplace hazards to acceptable levels of risk. PPE is specified in accordance with Material Safety Data Sheets (MSDSs) or International Chemical Safety Cards (ICSCs) according to the type of work undertaken. Safety signage is deployed to advise employees and others of specific hazards in work locations – Entry Prohibited; Mandatory PPE; firefighting equipment; etc. To raise safety culture and awareness among all of its employees the company provides ongoing safety training according to an annual training plan. Beyti ensures that some employees are certified firefighters.  

Beyti premises are protected against the risk of fire by a fire detection system including heat, smoke, and beam detectors, as well as a manual control unit. The firefighting system includes water sprinklers, and diverse types of extinguishers as appropriate to the areas in which they are located. For water firefighting systems there are three (3) pumps including a jockey pump to keep water pressure at required levels. The current and newly planned fire-fighting systems are installed according to the FM Global standards as per insurance requirements and in compliance with the Egyptian law. The factory is currently upgrading its firefighting system and is installing a sprinkler system in those areas not yet served by sprinklers, as well as upgrading the pipes and the tanks using FM Global Standards.

Training. In compliance with the requirements of the relevant government authorities, Beyti provides obligatory trainings to its employees (Firefighting and First Aid). In addition, the company undertakes several trainings to promote the culture of safety and quality amongst its employees. During appraisal, Beyti provided the training plan it conducts on a regular basis for its factory employees which includes the following topics: firefighting offered by an external service provider covering types of fires and different fire extinguishing tools and equipment; First Aid offered by an external service provider covering issues of First Aid/ CPR, blood borne infectious diseases; forklift training which is provided internally and focuses on mitigating workplace hazards and safety risks; PPE training (also provided internally) which addresses use of PPE; Safety, Health, and Workers’ duties are provided by an external service provider; Social Insurance information is offered by an external service provider and covers labor health and safety, labor laws, and labor rights; the Safety Festival is offered by an external service provider (UN ILO) and covers different topics to raise workers’ awareness related to occupational health and safety; safety awareness and raising safety culture is provided internally and covers issues related electrical risks, injuries and accidents, and other workplace hazards. Some of the training within the factory includes defensive driving as provided by ILO and other third parties. The factory conducts an evaluation of operators that includes familiarity with safety signage within facility. New staff are offered a 3-day safety induction course.

Resource Efficiency. The main resources consumed by current Beyti operations are electricity, water, fuels and the raw food materials, such as milk and plant extracts (e.g. juice) that are made into finished products. Those over which it has direct control as far as consumption are electricity, fuels and water. As such, the company has focused on using these inputs in the most efficient manner possible; and it continues to implement measures to further reduce their consumption of them, in particular, measures to reuse water, in keeping with the objectives of this Performance Standard.

For the existing operation, Beyti relies on three (3) main inputs; (i) grid electricity provided by the government (Beheira Electricity company) with an estimated consumption of 45,873,524 KWh annually (based on 2016 data), (ii) raw water with an estimated consumption of 1,121,565 (m3) in 2016, and (iii) diesel with an estimated consumption of 4,480,961 liters equivalent to 3,965 tons (also in 2016). The facility also operates four (4) diesel-fueled boilers (that are responsible for the bulk of the operations’ greenhouse gas emissions or GHG); three of the boilers have a capacity of 8 tons steam/hour and the fourth is 12 tons steam/hour. The emissions of these boilers range between 0-3ppm CO, 5%-11.55% CO2, and an overall efficiency ranging between 82% to 85%. Beyti is currently exploring options to save fixed electrical consumption by operating refrigeration pumps on variable frequency drive (VFD); this initiative will require an investment of EGP1 million and is currently under study.

For the existing and new operations, Beyti shall calculate the total CO2-equivalents based on its electricity and diesel consumption; amounts will be reported to IFC in the Annual Monitoring Report (AMR) along with reductions tied to initiatives such as the use of VFDs.

Air emissions monitoring. The main air pollutants from food and beverage processing operations are generally particulate matter (PM) and odor; these come primarily from the boilers.  Beyti implements air emissions control and monitoring measures in accordance with applicable regulations and standards, and has reached a level of efficiency ranging between 88% and 98% for its boilers emissions.

For the new factory, the main source of air emissions is expected to be the burning of diesel from the three (3) boilers used in the production process. According to the EIA, the PM from air emissions are expected to be 6.9 mg/m3, whereby other emissions include CO (14 mg/m3), NO2 (98 mg/m3), CO2 (5.9%), with an estimated energy efficiency of 89.7%. The rates of air emissions are below the benchmarks stipulated by the Egyptian Environment Law (9/2009) and its executive regulations (710/2012) and those of the WBG/IFC General EHS Guidelines.

Water use and efficiency. Water use is mainly allocated for processing and production purposes especially for the juice operations, and is supplied by the public government network (via a surface canal) via the Holding Company for Drinking Water and Wastewater in Beheira Governorate. Several technologies and processes are used for raw water treatment including ultra-filtration, clarification, reverse osmosis, chlorination, carbon filtration and ultra violet light.

For the existing facility, water is mostly used for production process within the facility including juice production, milk production, and fermentation process resulting in a total of 318,522.06 tons of products being made. As noted above, in 2016 total water consumption over 12 months was estimated to be 1,121,564.14 m3 of water; therefore, average rates of consumption are 3.52 m3 per ton of production for all products. Out of the total 318,522 tons of production, 42.5% are juice products (135,527.92 tons), 45.77% are milk products (145,819.11 tons), and 11.73% are fermented products (37,174 tons).

For its existing operation, Beyti is engaging in water saving initiatives to further reduce this rate of consumption including (a) condensate recovery from 20% to 35%, (b) homogenizing cooling water recycling, and (c) reducing Cleaning-in-Place (CIP) final rinse time of yogurt and process equipment. 

The new juice facility will include a raw water treatment facility with a capacity of 4,800 m3/day of water for the production of 1,872 tons juice/day. Average water use is expected to be 175 m3/hour and 4,200 m3/day or 600 m3 less than the total capacity of the raw water treatment facility. This use is divided as follows; 1,872 m3/day for industrial processes, 1,200 m3/day for CIP washing, 480 m3/day to supply the boilers, 600 m3/day for cooling process, and 48 m3/day for human consumption and floor cleaning purposes. The total of this water demand is 4,200 m3/day thereby giving an average consumption of 2.65 m3/ton juice produced, which is considerably lower than the 6.5 m3/ton figure referenced in the WBG EHS Guidelines for Food and Beverage Production.

Wastewater Treatment. For the existing operation, the plant utilizes a wastewater treatment plant with a daily capacity of 800 m3, originally constructed by Veolia. Beyti obtained a license to use Al Nasr agricultural drainage canal to release its treated wastewater and government authorities regularly take samples to check compliance with the limits contained with regulations. Industrial liquid waste is treated in a wastewater treatment plant then directed to the drainage canal; a portion of the treated wastewater is used to irrigate the landscape within the existing facility. (Beyti issues a monthly report indicating Effluent Treatment Plant Metrics for daily operations for PH, TDS, and COD (mg/L). The daily report includes volumes of raw wastewater, after DAF, and after SBR).

Nevertheless, while the factory has obtained the needed licenses and permits to currently use the agricultural drain, the EIA for the new facility indicates that the capacity of the existing water treatment unit (800 m3) is smaller than the actual volume of industrial water currently being generated. According to the EIA document, this limited capacity results in the company discharging some untreated wastewater in Al Nasr agricultural drain, which is not compliant with Egyptian Environmental laws and regulations (see law 48/1982 and law 82/2013 concerning pollution of surface drains.)

For this reason, Beyti decided to establish a new treatment facility as part of the construction of the new factory with a capacity of 3,200 m3. It is expected the treated wastewater in the new treatment facility shall total 2,972 m3 which is comprised of 1,388 m3 from the existing operations (as a corrective action to address the excess volume of wastewater being released untreated directly into al Nasr drain), in addition to 1,584 m3 of wastewater expected to be generated from the new juice operation. The 1,584 m3 of wastewater generated from the new operations is divided as follows; 1,392 m3 industrial wastewater, 24 m3/day from boilers, 120 m3/day from cooling towers, and 48 m3/day for sanitation purposes.

Based on the total capacity of the new treatment facility (3,200 m3/day), an amount of 1,200 m3 will be reused for landscape and watering trees within the facility, while 2,000 m3 of water will be released into the Nasr drain in line with the new Egyptian code for wastewater treatment number 501/2015. The company will report on compliance of wastewater release in agricultural drains from both existing and new facilities to IFC once the new treatment facility is up and running. This is ESAP action item # 4.

The IFC E&S team has proposed to the company to avoid co-mingling of the sanitary wastes with the process wastes in the new 3,200 m3/day ETP. The company is encouraged to explore the opportunity to treat and re-use some of the process water by restricting the use of the existing 800 plant for sanitary wastes (given that the facility does not include a large number of workers), and keep the 3,200 plant solely for process water. Beyti indicated that this option is under consideration at present with the local environmental consultant. A study is being undertaken to review the collection of waste water volumes and the piping network distribution, and their related impact on drained treated water KPI’s.

Management of solid and hazardous wastes. There are three (3) categories of waste generated by Beyti facility including; (i) solid waste, (ii) liquid waste (already described above), and (iii) hazardous waste. Solid waste constitutes around 75% of total generated waste by Beyti’s existing facility, and includes paper (2%), plastics (1%), cardboard (50.9%), steel metal (20.6%), sludge (16.4%), combi (1.9%), foil (0.1%), glass bottles (0.03%), and paper towels (0.2%). The factory separates waste at the source. Solid waste is sold by ton as scrap to contractors for recycling. Solid waste that cannot be sold is transported and handled by governmental authorities who are contracted on an annual basis to dispose waste. Non-recycled waste is disposed in public landfills in the city of Abou El Matamir.

Other liquid wastes include chemical substances and oil used in the repair and maintenance of the production equipment which is classified as flammable liquids. Hazardous waste mainly include chemicals used in the industrial process. All hazardous chemicals are stored in clearly marked lockable stores and their incoming/outgoing movements are documented in the department log book. These wastes are stored in barrels and are purchased by a petroleum company. 

As required by ESAP task #5, Beyti will prepare and implement a stakeholder engagement program, incorporating procedures to carry out stakeholder identification, mapping and ranking (prioritizing). Stakeholder engagement will ensure continuing and appropriate communications with identified stakeholders are undertaken and ensure that the existing grievance mechanism is publicized to those stakeholders. Beyti utilizes its Consumer Complaints and Corporate Email account (Consumer@Beyti-IDJ.com) and a Complaints Hotline (0800-644-4444), posted on the company’s website (http://beytiegypt.com/contacts/), to currently receive, record and respond to complaints.

The ESRS and the attached ESAP will be made available via the IFC Project Information Portal. The Company will also place an announcement on its website to inform the public about IFC’s environmental and social review (ESRS) findings and the corrective action items in the ESAP and the availability of these documents at specific public places. 

Name and Address.

Beyti (A Joint Venture of Almarai and PepsiCo)

Cairo Festival City, Plot 14 b01, Building A2

Tel: +(202) 23220491-9 (9 lines)

E-mail: Corporate@beyti-idj.com