Summary of Proposed Investment
Project Number
8805
Company Name
OAO DreVo
Date SPI Disclosed
Feb 19, 1998
Country
Russian Federation
Industry
Agribusiness and Forestry
Status
Completed
Sector
Grains and Beans
Department
Regional Industry MAS LAC & EUR
Environmental Category
B - Limited
Previous Events
Approved : Apr 9, 1998
Signed : Jul 23, 1998
Invested : Dec 30, 1998
Project Description
Summary Of Project Information (SPI)
| Project Name | Russian Federation-DReVo |
| Region | Europe |
| Sector |
Projected Board DateApril 9, 1998
Company NameDReVo
Technical Partner and/or Major Shareholders
The main Sponsor is Louis Dreyfus Négoce S.A., a French major grain and oilseed trading company which is part of the Louis Dreyfus Group, an agribusiness specialist with investments and operations in oilseed crushing, storage facilities, and orange juice worldwide. Trading activities from Louis Dreyfus Group amount annually to FRF100 billion (US$17 billion). Louis Dreyfus Group has also activities in shipping, energy sector, finance and commercial real estate
Project Cost Including Proposed IFC Investment
The Project Company would have a US$3.0 million equity including the IFC investment of US$0.9 million representing 30% of the Company’s shares, which would be purchased from the Sponsor.
Location of Project and Description of Site
The Project is located in the Voronezh region.
Description of Company and Purpose of Project
(include IFC’s Role and Development Impact)
DReVo would be involved in cash crop production through contractual arrangements with local farms with a surface totaling 20,000 ha the first year and up to 100,000 ha following the third year. DReVo will leverage on its equity base to provide the necessary working capital, seeds, fertilizers, technical assistance as well as equipment through leasing arrangements to the contracted farms in exchange of a share of the production. DReVo will also organize the trading of the production for the domestic and the export markets. IFC’s participation in the capital of the Company will increase the investors’ and DReVo trade partners’ comfort level to participate in one of the first integrated scheme in Russia that integrates suppliers of seeds and fertilizers, trading experts, suppliers of modern machinery and expertise in modern agriculture practice. DReVo is a pilot project that would try to break the vicious circle of farms facing a lack of rural finance, deteriorating terms of trade and low productivity, through an association of all agribusiness interests: farms, input supply companies, trading companies and financial institutions. Each of them will assume a share of the project risks (country, production, market) as well as a share of the benefits. These benefits will derive from improvements in the overall productivity of farming, and improvements in the terms of trade faced by the farms
Environmental Category and Issues
This is an environmental review Category B project. Environmental, occupational health and safety issues include: land cultivation techniques, use of pesticides and chemical fertilizers; pesticide/fertilizer handling, storage and disposal of containers and outdated materials and employee health and safety. Land cultivation techniques are to be improved from the present. A limited range of agro-chemicals is to be used, none of them is on the IBRD restricted list. Operator training will be given in the use of spraying equipment and chemicals. All supplies of chemicals will be safely stored in lockups both as a health and safety measure as well as minimizing shrinkage loss.
The is from the Public Information Center.
| Host country location of environmental documents | Voronezh, Russian Federation |
Date SPI sent to InfoShop February 19, 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
Related ESRS/ERS
