PROJECT

Projects

Summary of Proposed Investment

Project Number

8468

Company Name

Marsman-Drysdale Agribusiness Holdings, Inc.

Date SPI Disclosed

Mar 30, 1998

Country

Philippines

Industry

Agribusiness and Forestry

Status

Completed

Sector

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

Department

Regional Industry - MAS Asia & Pac

Environmental Category

B - Limited

Previous Events

Approved : May 27, 1998
Signed : Jan 22, 1999
Invested : Feb 17, 1999

Project Description

Summary Of Project Information (SPI)

Project NamePHILIPPINES: Marsman-Drysdale Agribusiness Holdings.
     
RegionAsia
Sector
Project No008468
Projected Board DateApril 30, 1998
Company NameMarsman-Drysdale Agribusiness Holdings
Technical Partner and/or Major Shareholders

The Shareholders of the Company are George W. Drysdale, Anne P. Marsman Drysdale, George Marsman Drysdale, Jr., and the Marsman Foundation, Inc. The Chief Executive of the Company is Roberto S. Sebastian, former Minister of Agriculture for the Philippines.

Project Cost Including proposed IFC investment

The total project cost is estimated at US$365.3 million, including the refinancing of US$13.0 million of the Company''s existing short-term loans. The Company began the investment program in 1997 and expects to complete the investment program by year-end 1999.

Location of project and Description of site

MDG''s existing banana plantations (Marsman Estate Plantation, Alta Vista and Nova Vista) are in the province of Davo del Norte and within a 100Km radius from Davo City. The largest of these, Marsman Estate Plantation, is a 1,300 hectare plantation which has been in operation for 28 years. The site of the new 1,000 ha banana operation is in the province of South Cotobato, Mindanao, on a land comprising mainly coarse grassland and shrub with small areas of low grade cultivation. Asparagus, Papaya, and Okra operations are in Southern Mindanao near the towns of Tupi and Polomolok where the lands are found at an elevation of 320 to 400 metres above sea level providing a suitable temperature for the cultivation of asparagus and okra. MDAVI has contracted with local farmers who now have 377 hectares under cultivation.


Description of Company and Purpose of Project

The Project consists of a US$35.3 million expansion and diversification program for the food and agribusiness operations of the Marsman-Drysdale Group ("MDG). The proposed Project entails a) expansion and renovation of banana production operations, including an expansion of the production of organic bananas (i.e. produced without pesticides and fertilizers), b) expansion of asparagus and mango production, c) diversification into okra and papaya production, d) addition of on-site processing equipment to improve crop utilization, and e) re-financing of US$13.0 million in short-term debt of the Company. Almost all production from the Project will be for export, mainly to oapan, China, and the Middle East.The Marsman-Drysdale Group ("MDG" or the "Group") is a diversified Philippine family-owned conglomerate established more than 75 years ago by the Marsman family. The Group''s core activities include: food/agribusiness, marketing and distribution of consumer goods, real estate, mining, travel and tourism and telecommunications. Total MDG turnover was US55.0 million in 1996, and is projected to exceed US$80.0 million in 1997. Total assets of the Group were US$113.2 million as of December 31, 1996.

The economic benefits of the Project include enhanced land productivity, increased value-addition to products through the food processing component, expansion of the fiscal base, and an increase in foreign exchange earnings of US$5.4 million annually in a country where foreign exchange reserves have been severely limited due to the ongoing regional economic crisis. Also, the Project provides additional direct employment for over 1,900 persons on the island of Mindanao, including approximately 750 jobs at contract growers (of asparagus, papaya, and okra) who would otherwise be unable to access the Japanese market.

IFC is providing valuable long-term financing to a local company which would otherwise lack access to longer-term funding for its capital investments. IFC''s financing is also expected to provide additional comfort to potential new customers and providers of trade finance in the difficult economic environment which continues to prevail in the Asia region.


Environmental Category and Issues

This is a category B project according to IFC''s environmental review procedure because specific impacts may result which can be avoided or mitigated by adhering to generally recognized performance standards, guidelines or design criteria. Key environmental, occupational health and safety issues that were reviewed for this project included: proper treatment and disposal of liquid and solid wastes and gaseous emissions; use and handling of agricultural chemicals and other hazardous materials throughout the production cycle; use of CFCs in cooling and refrigeration equipment; and fire protection and general worker health and safety. Wastewater from rinsing fruit and any solid wastes are handled in an appropriate fashion. The sponsor is committed to safe and appropriate use of chemical pesticides and is active in developing and implementing biological control measures as part of an integrated pest management approach. Pesticide use is tightly controlled and field applicators receive frequent training in handling and application. The company provides training for all employees on environmental issues, occupational health and safety, first aid and fire safety. Significant adverse impacts on the environment and worker health and safety are not expected from this project.


The is from the Public Information Center.

Date SPI sent to PIC March 30, 1998

“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