Summary of Proposed Investment
Project Number
8279
Company Name
Agro Industrial Paramonga S.A.A.
Date SPI Disclosed
Sep 16, 1997
Country
Peru
Industry
Agribusiness and Forestry
Status
Completed
Sector
Sugar and Confectionery
Department
Regional Industry MAS LAC & EUR
Environmental Category
B - Limited
Previous Events
Approved : Nov 13, 1997
Signed : Dec 16, 1997
Invested : Nov 13, 1998
Project Description
Summary Of Project Information (SPI)
| Project Name | Peru-Paramonga |
| Region | Latin America & Caribbean |
| Sector | Food and Agribusiness |
Project No008279
Projected Board DateOctober 31, 1997
Company NameAgro Industrial Paramonga S.A.
Technical Partner and/or Major Shareholders
The main sponsors are Mr.Jaime Mur, the president of Corporacin de Productos Alimenticios Nacionales PYC S.A., the country’s leading bakery, and the Wong Group, which operates a chain of 14 supermarkets in the Lima area.
Project Cost Including proposed IFC investment
Project cost is estimated at US$68.9 million. IFC’s proposed investment consists of an A loan of up to US$22 million and a B loan of up to US$23 million.
Location of project and Description of site
The project is located at Paramonga, on a coastal plain 195 km north of Lima. The mill and 5,200 ha of cane fields are situated in a valley between the Fortaleza and Pativilca rivers.
Description of Company and Purpose of Project
(include IFC’s Role and Development Impact)
The project will produce 120,000 tons of refined cane sugar for domestic and industrial use. It will be the first sugar estate in the country to be rehabilitated. IFC’s involvement supports the government program to “captitalize” the sugar sector, and has a strong demonstrative effect as the Paramonga model will undoubtedly be followed in the capitalization of other sugar companies. IFC plays a catalytic role by mobilizing US$23 million in B loan participation. Through the company’s extension program, crop financing, know-how and new cane varieties will be made available to outgrowers. IFC was instrumental in bringing new technology to Peru (diffuser technology, co-generation), and in arranging for technical flows between the company and the sugar industry in South Africa. The project insures the survival of a company which was technically bankrupt, thus safeguarding 1,800 jobs in a rural area, and enabling the company to pay some US$18 million in back wages and benefits to workers.
Environmental Category and Issues
This is a category B project according to IFC’s environmental review procedures. The company has developed plans to address all environmental and social issues. Mill process water is recycled for irrigation, filter cake is used as a fertilizer and bagasse is burnt to provide energy. The boiler will be equippped with wet scrubbers to meet World Bank air emissions standards. Due to overstaffing, the company plans to terminate 309 workers. A comprehensive package of health and safety measures will be incorporated in the project, including training in the handling and use of fungicides/pesitcides. Current overstaffing at the mill will be addressed through a phased program of retirement and lay-offs negotiated with staff and unions, and the company has prepared detailed plans to provide displaced workers with severance or retirement pay packages, training to acquire new job skills, and assistance in starting their own businesses. In addition, an outplacement and counseling office have been established to assist workers in finding suitable employment.
The Environmental Review Summary is available from the Public Information Center.
| Date SPI sent to PIC | September 16, 1997 |
“This Summary of Project Information is prepared and distributed to the public in advance of consideration of the proposed transaction by the Corporation’s Board of Directors. It is provided for the purpose of enhancing the transparency of IFC’s activities and should not be construed as presuming the outcome of IFC Board consideration.”
For Additional Information contact: Corporate Relations Unit -
telephone: (202) 473-7711
facsimile: (202) 974-4384
Environmental documents for this project are available at http://www.ifc.org and from the World Bank InfoShop (http://www.worldbank.org/html/pic/aboutinfo.html).
Sponsor / Cost / Location
Related ESRS/ERS
