46603
ZAMBEEF PRODUCTS PLC
May 25, 2022
Zambia
Africa
Sep 15, 2022
B - Limited
Active
Approved : Jun 27, 2022
Signed : Jun 29, 2022
Invested : Sep 13, 2022
Poultry Farming
Agribusiness and Forestry
Regional Industry - MAS Africa
The proposed IFC loan of up to US$35 million (in local currency equivalent) is to support Zambeef’s expansion plans, including the upgrade of the slaughter house and processing plant at Huntley environmentally controlled chicken housing at Huntley, milling in Mpongwe, cold chain refrigeration, a cheese plant at Huntley, pivot irrigation system in Mpongwe farm (1,000 ha), additional retail outlets and procurement of combine harvesters, milk homogenizers, tractors, trucks, and vehicles (the “Project”).
Zambeef Products PLC https://zambeefplc.com/ (“Zambeef” or the “Company”) is one of the largest agri-business companies in Zambia involved in the production, processing, distribution and retailing of beef, chicken and eggs, pork, dairy products, livestock feed (corn), and flour milling. The company, which continues to grow through organic expansion, was listed on the Alternative Investment Market of the London Stock Exchange (LSE) in June 2011 and of the Lusaka Stock Exchange since February 2003.
Zambeef’s operations include: (i) Farming Division in Huntley, Chiawa and Mpongwe farms; (ii) Meat and Dairy Division – beef feedlots and abattoirs in Huntley; chicken broilers, chicken layers and slaughterhouses in Mpongwe; dairy farm in Kulundu, (iii) Manufacturing/Processing Division which includes Novatek stock-feed plant, leather and shoe plant, flour mill and bakery, meat and dairy processing plants; (iv) Retail Division which includes Zambeef outlets, Shoprite butcheries, wholesale depots, and transport & distribution.
Zambeef is a repeat client of IFC. IFC provided US$10 million loan in 2010 (https://disclosures.ifc.org/project-detail/ESRS/29013/zambeef-products-plc) and US$30 million loan in 2012 (https://disclosures.ifc.org/project-detail/ESRS/31091/zambeef-expn). In 2016, DEG, CDC and IFC agreed upon a consolidated E&S Action Plan (ESAP) which is in process of being implemented. Zambeef’s current E&S performance is considered satisfactory.
IFC’s environmental and social (E&S) review of the proposed investment included (i) meetings on 21–23 April 2022 with Zambeef’s Chief Executive Officer (CEO), Environment, Occupational Health and Safety (EHS), and Human Resource (HR) Directors and management team; (ii) review of available corporate and project-level environmental and social documents, including ESAP implementation progress of the 2012 investment (#31091) and of 2016, detailed responses to the IFC’s E&S appraisal questionnaire for this repeat investment, including EHS policies, Standard Operating Procedures (SOPs), contractor EHS compliance Contract Agreement; emergency preparedness and response procedures; HR management policy and procedures, including contract with employees; water balance study for Mpongwe irrigation project, hazardous materials management plan, bio-security manual, and Stakeholder Engagement, Communication and Grievance Management Plan; (iii) presentation on EHS management system and performance by the environment and technical services team at the company’s headquarters in Lusaka; and (iv) visit to retail outlets and the greenfield site in Mpongwe which also allowed a review of the current biosecurity, animal welfare and use of antibiotic at the broiler housing facilities.
The proposed temperature-controlled broiler housing at Huntley Farm, the mill and the 1,000 ha irrigation system will be located within the footprint of the 46,876 ha of Zambeef’s Mpongwe farm, which is considered modified habitat without significant biodiversity value and no known cultural heritage site. Environmental and Social Impact Assessments (ESIA) for the broiler farms and the mill have been commissioned. The draft ESIA report describes the sites as a continuum of modified habitats. The E&S Management Plan (ESMP) proposes mitigation measures on management of wastes, air pollution including offensive odors, and workers occupational health and safety (OHS) conditions, among others. The ESIA concluded the project will unlikely have an adverse impact on biodiversity values.
IFC’s appraisal used the Global Map of Environmental and Social Risk in Agro-Commodity Production (GMAP) for initial high-level risk screening of child and forced labor, significant OHS and biodiversity risks associated with maize, poultry and cattle production in Zambia, the U.S. Department of Labor ILAB Sweat and Toil app to screen for exploitative labor practices for corn, poultry and cattle production in Zambia, IFC’s Gender-Based Violence (GBV) risk screening tool to screen for GBV risk in Zambia, the Integrated Biodiversity Assessment Tool (IBAT) to screen for negative impacts on critical habitats from current maize sourcing operations for the feed mill (using GPS coordinates of the feed mill and a radius of 50 km as catchment areas for smallholder corn farms in Mpongwe District and cattle raising (using GPS coordinates of the Huntley cattle abattoir and a radius of 60 km as catchment areas for smallholder cattle farmers). The high-level biodiversity screening indicates that maize sourcing in Mpongwe District is in consolidated agricultural lands and/or not located in recently deforested areas. Similarly, smallholder cattle farmers do not graze in recently deforested areas. The risks of child and/or forced labor and significant OHS risks is non-material as corn production from third-party suppliers is mechanized and cattle farming is at household level.