30067 - Soufflet ECA

Who We Are
Who We Are

IFC is the largest global development institution focused on the private sector in developing countries. By encouraging growth, IFC advances economic development, creates jobs and improves the lives of people.
More About Us
About IFC

Our Leadership

Development Partners
Accountability

Learn more about accountability
Annual Report

Download the Report
What We Do
What We Do

IFC advances economic development and improves the lives of people by encouraging the growth of the private sector in developing countries. We achieve this by investing in impactful projects, mobilizing other investors, and sharing expertise.
What We Do Overview
SOLUTIONS

Our products and services
OUR PRIORITIES

Climate Business

Fragile & Conflict Afflicted Situations

Gender

Mobilizing Private Capital

Sustainability
SECTORS & EXPERTISE

Agribusiness & Forestry

Creative Industries

Education

Financial Institutions

Funds

Health

Infrastructure

Manufacturing

Public-Private Partnerships

Tourism, Retail & Property

Trade & Supply Chain Finance

Venture Capital

Working Upstream
Where We Work
Where We Work

As the largest global development institution focused on the private sector, IFC operates in more than 100 countries around the globe. We apply lessons learned in one region to solve problems in another.
Overview
By Region

Africa

East Asia and Pacific

Europe

Latin America and the Caribbean

Middle East and Central Asia

South Asia
Our Impact
Our Impact

Our impact improves lives. IFC brings a clear set of advantages to the world’s most challenging markets. Including a history of innovation, a global mandate, and a determination to achieve measurable development impact.
Our Impact Overview
PRINCIPLES & MEASUREMENT

Impact Investing at IFC

Measuring and Monitoring (AIMM)

Evaluation

Sustainable Development Goals (SDGs)

Owned by 186 member countries and consistently rated AAA/Aaa. IFC aims to achieve our mission of promoting development by providing debt and equity to the private sector, through a range of benchmark and bespoke products.

For Partners

For Investors

Get in Touch

Summary of Proposed Investment

Project Number

30067

Company Name

SOUFFLET FINANCES

Date SPI Disclosed

Dec 3, 2010

Country

Eastern Europe Subregion

Industry

Agribusiness and Forestry

Projected Board Date

Jan 6, 2011

Status

Completed

Sector

Grain Processing (Milling, Starch, Flour, Malt)

Department

Gbl Ind, Manufact, Agribus & Services

Environmental Category

B - Limited

Previous Events

Approved : Jan 13, 2011
Signed : Jan 21, 2011
Invested : Mar 3, 2011

Project Description

The Project involves providing a multi-country A-Loan of up to €60 million - including IFC current exposure - to Soufflet’s Eastern Europe and Central Asia operations. The Project will mainly support Soufflet in Russia, Ukraine, Kazakhstan, while a small portion of the facility (up to €10 million) will also be used for Soufflet’s operations in Serbia and Romania. It will support Soufflet’s strategy to increase its presence and grow in ECA.

Soufflet will use the proceeds of the IFC Loan to: (i) originate wheat, barley and other cereals; (ii) increase in-kind prefinancing to farmers and procurement of alternative grains and oilseeds; (iii) process grain into malt; and, (iv) support trading operations. The Loan will be committed as a 4-year A-Loan with a revolver feature, to match working capital cycles.

In 2009/2010, Soufflet originated almost half a million metric tons (mt) of grain in these five countries, where the Company owns 4 silos. Soufflet also owns and operates 5 malting plants in the region that sold 377,000 mt of malt in 2009/2010. With a stabilized source of funds, Soufflet is expected to increase its origination volumes. This would in turn help the Company scale up its presence in the region, develop its input supply and farmers prefinancing, and diversify its procurement of grain beyond malting barley, which would ensure a better capacity utilization of its silos. This additional financing will also provide a buffer against the volatility of grain prices.

Sponsor / Cost / Location

Product Line	IFC Investment (million USD)
Risk Management
Guarantee
Loan	80.30
Equity

Development Impact

Project is to secure the working capital needs of a large regional player in the grain/oilseed/malt sector in five countries in a challenging economic context. The Project supports the long term strategic commitment of Soufflet to the region, where it expects to expand its activities in in-kind prefinancing of farmers (in the form of inputs), procurement of grains and oilseeds, storage and logistic services, malt processing and international trading.

- SMEs, farmers, and employment. The Project will also carry significant benefits for Soufflet’s partners. In particular, employment and number of farmers reached are expected to grow. Most farms in the region are fairly large and provide substantial employment in rural areas. In addition, Soufflet’s activities also support many MSMEs (e.g. independent elevators, importers of inputs, transportation companies, security, catering, cleaning, maintenance, etc), which further reinforces the Company’s direct impact on the local economy.

- Upgrading of storage/logistics infrastructure. Soufflet has acquired and developed 210,000mt of grain storage capacity in the five countries. These facilities were usually poorly maintained, inefficient because of bottlenecks at various stages of loading and unloading, and were not operated at standards of safety applied to the Company’s facilities in other countries. The Company has engaged into a multiyear improvement program that frees usable capacity, eliminates bottlenecks and upgrades the standards of operation to internationally accepted levels. This will in turn improve the quality of services to local farmers and local residents. This also provides a benchmark for the operation of competing elevators in the region.
- Building more competitive markets. Storage and drying capacity in inland elevators remains limited relative to the current production levels, which provides better negotiating power to elevator operators. Soufflet’s expansion of its presence and higher standards of operation will provide valuable competition in this underserved market.

- Agricultural productivity improvements. Soufflet has a staff of agronomists whose primary mission was to ensure adequate agronomic practices for the production of high quality malting barley. As the Company expands its procurement towards other grains and oilseeds, this expertise is being redeployed to ensure that a package of inputs, prefinancing, agronomic advice, storage and marketing services is available to local farmers to improve productivity and strengthen their partnership with Soufflet.

- Strengthening rural economic development. Soufflet’s operations generate significant economic opportunities for rural communities in terms of employment as well as linkages to MSMEs.

Countercyclical intervention: IFC plays an important counter-cyclical role by providing working capital to agribusiness supply chains in a challenging regional economic.

Debt profile. In the face of current volatile economic and financial conditions in the Region, local commercial banks usually extend one year renewable facilities, which represent about 50 percent of the ST debt of the Company in the 5 countries. Soufflet is eager to secure a portion of its financing requirements with confirmed credit lines for a longer maturity. In addition, most credit lines are granted on a country basis, which prevents the reallocation of funds when country needs evolve. The IFC facility will allow Soufflet to optimize its use of funds based on country requirements at a given point in time.
Local currency financing. Soufflet has requested that a portion of the facility be offered in local currency in Kazakhstan, which will eliminate the currency mismatch.

Demonstration effect: By partnering with the IFC, the client will be able to enhance its risk profile and improve its chances to secure additional financing from other banks or other financing providers. IFC’s involvement in the Project (along with EBRD) also sends a positive message and reassures other lenders and investors that financing agriculture in the region remains an attractive opportunity, even under difficult economic circumstances.

Long-term partnership with a leading global agribusiness group: The Soufflet Group is today’s the world’s second largest maltster and one of Europe’s main collectors of grains and wheat millers. Its development over the past decade has been mostly focused on Eastern Europe and processing activities. As it explores further growth opportunities in the Region and in other continents, Soufflet values IFC’s country knowledge and views the IFC as one of its key partners to facilitate its development in a financially sustainable way.

This project is being reviewed as a Direct Investment according to IFC’s Social and Environmental Sustainability Procedures and has been categorized as B. The review of project indicates that PS1, PS2, PS3, PS4 are applicable to the Soufflet Group''s subsidiaries in the 5 ECA countries. PS5, PS6, PS7 and PS8 are not applicable, since there is no expected land acquisition or involuntary resettlement, Biodiversity loss, indigenous populations or cultural heritage sites in the project areas.

Contacts

For Inquiries About the Project, Contact

Marie-Ange Mathieu
Deputy Financial Director
Ets J. Soufflet
Quai du General Sarrail
10400 Nogent sur Seine Cedex
France

F : +33 3 25 39 80 57

www.soufflet.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: 202-974-4384
E Mail: Webmaster

Local Access of Project Documentation

Marie-Ange Mathieu
Deputy Financial Director
Ets J. Soufflet
Quai du General Sarrail
10400 Nogent sur Seine Cedex
France

F : +33 3 25 39 80 57

www.soufflet.com

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.

Projects

Summary of Proposed Investment

Project Description

Sponsor / Cost / Location

Development Impact

Similar Projects

Contacts

Projects

Summary of Proposed Investment

Project Description

Sponsor / Cost / Location

Project Sponsor and Major Shareholders of Project Company

Total Project Cost and Amount and Nature of IFC's Investment

Board Approved IFC Investment

Location of Project and Description of Site

Development Impact

Anticipated Impact Measurement & Monitoring (AIMM) Assessment

IFC's Expected Development Contribution

Environmental and Social Issues - Category

Press-Release

Related ESRS/ERS

Similar Projects

Contacts

Disclaimer