29907 - Favorita WC

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Summary of Proposed Investment

Project Number

29907

Company Name

FAVORITA FRUIT COMPANY LIMITED

Date SPI Disclosed

Nov 8, 2010

Country

Ecuador

Industry

Agribusiness and Forestry

Projected Board Date

Dec 10, 2010

Status

Completed

Sector

Fruit and Vegetable Preservation or Processing (Canning, Freezing, Drying, Jams, etc.)

Department

Regional Industry - MAS LAC

Environmental Category

B - Limited

Previous Events

Approved : Apr 5, 2011
Signed : May 31, 2011
Invested : Jul 15, 2011

Project Description

Favorita Fruit Company (Favorita or the company), a holding company, is one of the leading banana growers and exporters in Ecuador. The company operates other wholly-owned subsidiaries whose activities include trading and shipping bananas, producing plastic bags, providing fumigation services, and importing and distributing fertilizers. It has requested IFC’s assistance in financing a corporate-wide investment program which involves: - replanting efforts to change the banana variety from Valery to Williams - redesign and modernization of equipment and machinery; and - refinancing short and medium term debt The project is aimed to: - continue reducing operating costs by increasing the banana yield per hectare; - carry out needed maintenance investments and equipment upgrades to maintain the company’s competitive position in the global market; and - strengthen Favorita’s financial structure in order to firm-up its banana/overall operations in Ecuador.

Sponsor / Cost / Location

Product Line	IFC Investment (million USD)
Risk Management
Guarantee
Loan	11.0
Equity

Development Impact

The Project supports the continued growth of one of Ecuador's leading agribusiness companies and a long standing IFC client. It will improve Favorita's competitiveness in the production of bananas, and ensure greater traceability and sustainability certification demanded by customers in developed markets. The Company employs over 10,000 workers (nearly 9000 agricultural) and provides commercial opportunities for over 300 business partners and 400 farmer suppliers.

IFC will support a locally-owned company by providing long-term finance with tenors not available in Ecuador. Ecuador's history of political volatility has made for a difficult operating environment for its private sector companies. Nonetheless, Favorita has a long tradition within the Ecuadorian banana industry, and has expanded its market share in local and overseas markets. IFC's support of the Group would provide assistance during a critical period of political instability and help a viable Ecuadorian company continue its growth domestically and through exports abroad

This is a category B project according to IFC Environmental and Social Review Procedure because a limited number of specific environmental and social impacts that may result have been or are being avoided or mitigated by adhering to generally recognized performance standards, guidelines or design criteria. Being an existing IFC client, the project will continue to focus attention on the dissemination of best management practices within acceptable environmental and social standards. The project is designed to manage and reduce social and environmental risks in the Company operations in compliance with IFC Performance Standards, Ecuador national regulations, and WBG General EHS Guidelines.

Contacts

For Inquiries About the Project, Contact

Mr. Paulo Mello – Industrial Vice President Av Carlos Julio Arosemena, Km 2.5 Mz. 001 Solar 41-42, frente al C.C Alban Borja Guayaqui, Ecuador Tel: 59 (034) 2208670 Fax: 59 (034) 2208664 Email: pmello@grupowong.com

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: 202-974-4384E Mail: Webmaster

Local Access of Project Documentation

Project information will be made available on company’s website and on the gates of company’s headquarters: In Quito: Paulo Mello, VP Industrial Favorita Calle Dario Figueiroa 339 y General Enriques Sangolqui – Ecuador Tel: 5932334695 -In Mirador de Ila: Paulo Mello, VP Industrial Favorita Km 41 via sto domingo quevedo Tel 5935700119 -In Guayaquil subsidiaria: Paulo Mello, VP Industrial Favorita Mapasingue oeste av 6ta y Via a Daule Tel 59342350129 -In Manta subsidiaria: Paulo Mello, VP Industrial Favorita Km 7.5 Via Montecristi y Manta Tel 59394171461 -In Cuenca subsidiaria: Paulo Mello, VP Industrial Favorita Parque Industrial Ocatvia Chacon 215 y primera transversal Tel 59372801545

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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