26076 - Sociedad Agricola Viru S.A.

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Summary of Proposed Investment

Project Number

26076

Company Name

Viru S.A.

Date SPI Disclosed

Jun 22, 2007

Country

Peru

Industry

Agribusiness and Forestry

Projected Board Date

Jul 25, 2007

Status

Completed

Sector

Fruits and Vegetables

Department

Gbl Ind, Manufact, Agribus & Services

Environmental Category

B - Limited

Previous Events

Approved : Aug 16, 2007
Signed : Sep 10, 2007
Invested : Sep 24, 2007

Project Description

The project entails:

- the overhaul and automation of the company’s canning plant in the south of Peru (Chincha);
- the acquisition and development of new asparagus plantations with irrigation;
- the provision of permanent working capital and
- the refinancing of existing debt.

Sponsor / Cost / Location

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

Development Impact

The project supports the continued development of one of Peru’s leading agribusiness companies. It will improve Viru’s competitiveness in the production of asparagus, artichokes and peppers through better economies of scale. The expansion will benefit the local economy, which remains particularly important in affected rural areas in the departments of La Libertad and Ica. Other benefits result from the continuation and expansion of benefits to employees, farmers, agricultural industry and community development.

Employment: the company will continue to be a major contributor to the local economy: it directly employs 2,247 full time workers in its plants and 2,282 full-time agricultural workers for a total of 4,558 employees (36% women and 64% men).

Farmer benefits: The company also procures part of its requirements from third parties who benefit from canning operations. Viru procures from about 120 independent producers of peppers and artichokes (approximately 1,800 has).

Industry diversification: Viru was the pioneer in artichoke production in Arequipa, where it was the first to introduce and promote production from third-parties in 2004. As a diversification from asparagus, production of artichokes and peppers was almost non-existent in Peru five years ago and currently represent over US$100 million in exports.

Community development: Over the years, the company has built a constructive relationship with the communities where they operate. The company established a Social Responsibility Department (SRD) aimed to improve the quality of life of its workforce and the community, The SRD has focused its activities primarily on improving the educational system, security, and income generation.

Through the proposed investment IFC would be helping a leading local agribusiness company increase its export revenues and improve its competitiveness. By supporting the company, IFC will be providing long-term funding with competitive pricing and amortization schedules not available in Peru. This will allow the company to face an increasingly competitive export market.

In addition, IFC will play a role in supporting government objectives through a project that will further foster the diversification in Peru’s exports and reduce the unemployment rate in the coastal agricultural regions. Considering the effect that agribusiness has on the country’s unemployment rate, the government has an important focus in strengthening this industry.

This is a category B project according to IFC’s procedure for Environmental and Social Review of projects because a limited number of specific environmental and social impacts may result that can be avoided or mitigated by adhering to generally recognized performance standards, guidelines, or design criteria. IFC professional staff performed a physical evaluation of the project and environs, and reviewed relevant company and government documentation.

Contacts

For Inquiries About the Project, Contact

Carlos Roldan, General Manager
Carretera Panamericana Norte, Km 521
Viru, La Libertad-Peru
Fax: (5144) 371-248

www.saviru.com

Local disclosure location:

The disclosed documents will be available to the public at the municipalities of Trujillo and Chincha,
in their respective libraries.

For Inquiries and Comments About IFC, Contact

General IFC Inquiries
IFC Corporate Relations
2121 Pennsylvania Avenue, NW
Washington DC 20433
Telephone: 202-473-3800
Fax: 202-974-4384
E Mail: Webmaster

This Summary of Proposed Investment is prepared and distributed to the public in advance of the IFC Board of Directors' consideration of the proposed transaction. It is not an offer of shares to the public and is intended solely to enhance the transparency of IFC’s activities. This document should not be construed as presuming the outcome of the Board decision. Board dates are estimates only. The following SPI is disclosed in accordance with IFC’s Policy on Disclosure of Information that went into effect April 30, 2006.

The map is for illustrative purposes and does not imply the expression of any opinion on the part of the World Bank, concerning the legal status of any country or territory or concerning the delimitation of frontiers or boundaries. Country borders or names do not necessarily reflect the World Bank Group's official position. In some cases, available project location information is limited to the country of the project's activities. Locations are approximate.

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