31829 - Pran Natore Agro

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Summary of Proposed Investment

Project Number

31829

Company Name

PRAN DAIRY LIMITED

Date SPI Disclosed

Dec 22, 2011

Country

Bangladesh

Industry

Agribusiness and Forestry

Projected Board Date

Jan 24, 2012

Status

Completed

Sector

Other Food

Department

Gbl Ind, Manufact, Agribus & Services

Environmental Category

B - Limited

Previous Events

Approved : Mar 6, 2012
Signed : Apr 4, 2012
Invested : Aug 24, 2012

Project Description

Pran Group (“Pran” or the ‘Company’) is seeking IFC’s assistance to finance the expansion of its food processing operations. The proposed expansion project has been incorporated as a new private limited company, Natore Agro Limited. Pran is a diversified group involved in the production and sale of a wide product range covering beverages, snacks, culinary products, confectionery, dairy products, rice and tea. The Project (“Pran Natore Agro”) consists of an investment of approximately $25 million for the expansion of Pran’s food processing and manufacturing capacity with the goal of introducing new packaged food and spice/condiment products to the Company’s product line for both local and export markets.

Sponsor / Cost / Location

Product Line	IFC Investment (million USD)
Risk Management
Guarantee
Loan	10.0
Equity

Development Impact

Agriculture accounts for 21% of Bangladesh's GDP, whereby 55% of the country's population derives its income from the sector. Private sector involvement will ensure continued growth in income-generating agriculture activities, particularly by integrating small farmers into formal supply chain linkages such as those that Pran's operations have established. In addition to creating over 1,200 new jobs, the proposed Project will positively impact the livelihood of several thousand farmers and their communities by ensuring consistent demand and fair pricing for their produce. Further, Pran's unparalleled distribution network will enable the Company to reach under-served, impoverished communities and provide them with affordable, essential food products of high quality.

IFC's Additionality in the Project includes: 1. Providing long-term (FX) financing, otherwise difficult to secure in the current market environment given the prevailing liquidity constraints on the local market, to support an existing client consolidate its market-leading position in Bangladesh and grow export volumes. 2. Helping to strengthen relationship and providing continued financing and advisory support to a potential south-south client since Pran Group is implementing plans to expand its market presence in neighboring South Asian countries.

This is a Category B project according IFC’s Procedure for Environmental and Social Review of Projects.

Key environmental and social (E&S) issues associated with this Project include: development and implementation of integrated management systems covering quality, environment, health and safety and food safety; assurance of fair, safe and healthy working conditions in compliance with local regulatory requirements and relevant Performance Standards; resource efficiency of the operations (water, energy); monitoring and management of air emissions, wastewater treatment and discharge, solid and other waste disposal; the impacts of operations on local ambient air quality; and safety management including emergency preparedness and response.

Further details on the potential environmental and social impacts of the project, corresponding mitigation measures and guidance on how and where information about the project are provided in the Environmental & Social Review Summary.

Contacts

For Inquiries About the Project, Contact

Pran-RFL Group Pran-RFL Center, 105 Middle Badda GPO Box 83, Dhaka 1212 Bangladesh

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

Pran-RFL Group Pran-RFL Center, 105 Middle Badda GPO Box 83, Dhaka 1212 Bangladesh

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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