Westfalia is a leading multinational supplier of fresh subtropical fruit and related processed products to international markets. It is part of the HMH Group, with an annual revenue of US $700 million and net income of ~US $37 million. Westfalia grows, sources, ripens, packs, and distributes sustainably grown avocados year-round. Westfalia’s vertically-integrated supply chain enables it to market quality fruit from across the globe.

HMH is a South African-based vertically-integrated, natural resource-based Company which was created in 1949 by the late Dr. Hans Merensky (a biologist and philanthropist). It has two main businesses, namely: (i) the fruit business ("Westfalia") and (ii) the timber business ("Merensky" or "Merensky Timbers").  HMH's operations are spread in Sub-Saharan Africa, South America and Europe. Group shareholding is as follows: The Hans Merensky Foundation -  40.02%, the Industrial Development Corporation (IDC) - 29.7%, IFC - 20%, and, three Broad-Based Black Economic Empowerment (BBBEE) organizations: Vuka Forestry Holdings (4.03%), Women Investment Portfolio Holdings (WIPHOLD) (3.30%), and, HMH Employee Share Ownership Plan (2.95%) owning the outstanding 9.9%.

Westfalia is planning to raise US $140 million through a syndicated five-year facility to acquire an avocado food grower in Chile, establish a Nursery in Colombia, develop supply chain infrastructure in Mexico, and expand marketing operations in North America and Europe. The investment in Part I countries (Europe and USA) is critical in supporting further production in Part II countries. IFC is providing a loan of up to US$ 35 million, as part of a broader $165 million syndicated facility.   

Major portion of the financing will be used in Chile, Colombia, and Mexico to strengthen avocado supply chain from these markets,

Key E&S issues and risks associated with the project include: (i) functionality of the company’s E&S management and monitoring systems, (ii) management of labor and provision of adequate working conditions, and operational health and safety (OHS) programs, and (iii) monitoring and management of air emissions, waste, wastewater and hazardous materials.

This project involves an expansion of IFC’s current financing for HMH and its subsidiaries through WFIL’s expansion of activities in Colombia, where a new nursery providing seedlings for internal and out grower use is planned; and, acquisition of a Latin American avocado producer that until now has worked as an independent supplier to WFIL. 

This is a category B project, according to IFC’s Policy on Social and Environmental Sustainability, because limited, specific environmental and social impacts that may result can be avoided or mitigated by adhering to generally recognized performance standards, good international industry practices, environmental, health and safety (EHS) practices, and  design criteria as described in the following sections.