North Andre’s main shareholders are Glory Cause (32.2%), Donghua Fruit (16.8%), Donghua BVI (10.4%), Chengdu Uni-President (5.0%), Mr.Yung Ka Hee Titus (2.0%) and Beijing RAJ (0.7%). The remaining 32.9% shares are held by public shareholders. Glory Cause and Beijing RAJ are controlled by Creat Group, a limited liability company incorporated in China in 1996 with investments in the hi-tech, electronics, communications, pharmaceutical and agribusiness industries. Creat Group’s largest single shareholder (52%) is Mr. Zheng Yue Wen, who serves as North Andre’s Chairman. Donghua Fruit and Donghua BVI were founded by Mr. Wang An, who is also North Andre’s CEO. Donghua Fruit is a diversified company whose scope of activities includes agribusiness, construction materials, and general merchandise.

The total project cost is estimated at $95.0 million, including working capital of $43.5 million. The proposed IFC investment is a $15 million A Loan for IFC’s own account.

15.0 million (USD)

Product Line	IFC Investment (million USD)
Risk Management
Guarantee
Loan	15.0
Equity	0.0

* These investment figures are indicative

Headquartered in Yantai city, Shandong province, North Andre now has four wholly owned operating plants all within proximity to major apple production regions. The four plant locations are: - Muping district of Yantai city, Shandong province; - Baishui county of western Shannxi province; - Longkou county of Shandong province; and - Feng county of Xuzhou city, Jiangsu province.

Development Impact The project supports North Andre’s construction/expansion of three facilities -- Baishui, Longkou, Feng -- and the renovation of the plant at Yantai city. The project reflects the industry’s gradual migration to prime apple producing regions and the ongoing consolidation of the sector by the more efficiently managed, technologically advanced and better capitalized companies. North Andre’s expansion will provide a reliable market outlet for apple farmers located near to its processing facilities. The Government and several World Bank projects have supported China’s apple sector as a means to improve the livelihoods of thousands of farmers in some of China’s most remote areas. The AJC industry had initially provided a market for out-of-grade fruits which would otherwise have been discarded. The industry is now promoting the growth of specialized, processing-apple orchards. This development is creating new employment opportunities for many farming communities. Apple processing, as opposed to apple farming, is an automated and capital-intensive activity. As such, incremental employment will be less at the processing plants than for apple farming, harvesting and transporting activities. In 2004, the company employed 464 direct employees, compared with 74 in 2001. It employs up to 450 temporary workers each pressing season. North Andre’s remuneration policy aims to be at the upper quartile for the industry. IFC Role IFC’s presence in the Project will - Help to promote value-added products, better food safety standards and traceability of products and, thus, improve the perception, competitiveness and sustainability of China’s AJC industry. - Assist North Andre to rationalize its capital structure and more appropriately fund its working capital needs and, by so doing, better carry out its function as a leadership company. - Provide advice to the company with regard to incorporating international environmental and corporate governance practices into its business model.

This is a Category B project according to IFC''s environmental and social review procedures. Environmental, social, health and safety issues that were reviewed during appraisal included:

- site selection and acquisition;
- management systems for quality, environmental and social affairs;
- occupational health and safety and working conditions;
- social issues and corporate social responsibility;
- control of pests species and technical assistance programs for fruit product out growers;
- air emissions from steam and heat generation;
- sustainability and quality of potable water supply used in food manufacturing; and
- management of liquid, solid and hazardous wastes.

This is a Category B project according to IFC''s environmental and social review procedures. Environmental, social, health and safety issues that were reviewed during appraisal included:

- site selection and acquisition;
- management systems for quality, environmental and social affairs;
- occupational health and safety and working conditions;
- social issues and corporate social responsibility;
- control of pests species and technical assistance programs for fruit product out growers;
- air emissions from steam and heat generation;
- sustainability and quality of potable water supply used in food manufacturing; and
- management of liquid, solid and hazardous wastes.
Location of environmental documents in locally affected community
The Environmental Review Summary (ERS) is available to the public at the following locations: - Local newspaper (Yantai Daily); - Company’s public bulletin boards in Baishui and Xuzhou plants; and - Offices of local government authorities.