PT. Fugui is owned 100% by Fugui Flour & Grain (Hong Kong).

The total project cost is estimated at $65 million. The proposed IFC investment includes an A loan to Fugui from IFC’s own account for an amount up to $30 million.

30.0 million (USD)

Product Line	IFC Investment (million USD)
Risk Management
Guarantee
Loan	30.0
Equity

* These investment figures are indicative

Gresik, Surabaya, East Java Province. The plant is located in a developing industrial area in north Gresik. No residents or land users were displaced.

The project is expected to have the following development impacts:

- generate new local employment during both construction and operation phases;
- increase income tax revenues paid to the government of Indonesia;
- increase competition within the domestic market; and
- increase scale of a local value-added industry.

IFC’s expected development contribution may include:

- providing long-term local currency financing; and
- assistance in helping the company comply with IFC’s Environmental & Social Performance standards

This is a Category B project according to IFC’s Procedure for Environmental and Social Review of Projects. Environmental, social, health and safety issues which may be associated with this type of project, and which were reviewed during appraisal, included: management systems for environmental, health and safety (EHS), and life and fire safety issues; compliance with local and WB/IFC requirements for air emissions, wastewater discharges, indoor air quality, noise and waste management; energy, water and other material use and efficiency; labour issues and community engagement.

PT Fugui F&G Indonesia (PT. Fugui or the company) is a newly established flour-mill company located in Surabaya. All expansion activities are occurring within the company’s existing property so no new land acquisition is required. The review of this project consisted of appraising technical, environmental and social information submitted by the company in response, interviews with company representatives and site visits.

All staff receive written information on the company’s human resources policies, compensation and benefits, sick leave and holiday allocation, insurance, etc. A variety of mechanisms for engaging staff had been established and the company is very attentive to worker needs and makes significant efforts to ensure a pleasant working environment is maintained. The company complies with local labor laws and has a policy of non-discrimination in the workplace. The company communicates with local government and community representatives on a regular basis and has established a mechanism for receiving and addressing grievances.

PT Fugui has implemented systems and procedures to prevent and respond to emergencies, to conduct emergency response drills and to engage local fire and police authorities in the drills and when needed in the event of an emergency. EHS and fire safety training will be conducted internally every four months on matters ranging from fire safety equipment operation to safe machine operations and heavy lifting to food hygiene. For the transportation, storage and operational components of new flour mill operations, the company engaged an internationally renowned supplier to design and review the establishment of the system with their own technicians onsite. Safety measures that have been adopted to prevent and detect fire and explosion risks include: sensors to monitor motor speed and temperature of machinery; tailored alignment of the conveyor belt with automotive controls to maintain speed consistency (to detect conveyor belt slips that may create friction); dust sensors; automated ventilation control systems in the silos; periodic grain turnover and mixing to dissipate any build up of dust and heat. In addition to these installed safety measures, the company has implemented additional safety procedures and training for its staff and included the operations as part of its overall emergency response procedures. Fire extinguishing equipment is located in prominent locations throughout the company’s facilities and is checked on a monthly basis.

The Corrective Action Plan for the project includes requirements for PT Fugui to certify its operations to ISO 22000 within a reasonable time frame.