Summary of Proposed Investment
Project Number
9233
Company Name
Corporacion Supermercados Unidos S.A.
Date SPI Disclosed
Nov 9, 1998
Country
Costa Rica
Industry
Tourism, Retail and Property
Status
Completed
Sector
Retail (Including Supermarkets, Grocery Stores, etc.)
Department
Gbl Ind, Manufact, Agribus & Services
Environmental Category
B - Limited
Previous Events
Approved : Mar 18, 1999
Signed : Mar 21, 1999
Invested : May 14, 1999
Project Description
Summary Of Project Information (SPI)
| Project Name | Costa Rica, Nicaragua, El Salvador, Honduras, Dominican Republic-Corporacion Supermercados Unidos S.A., ("Superunidos" or "the Company") |
| Region | Latin America & Caribbean |
| Sector |
Projected Board DateDecember 9, 1998
Company NameCorporacion Supermercados Unidos S.A.
Technical Partner and/or Major Shareholders
Superunidos ownership is the following: 82.5 % is held by the Holding Grupo Mas X Menos and 17.5% by various friends of the Uribe family. The Holding Grupo Mas X Menos is 95% owned by the Uribe family and 5% by Mr. Samuel Hidalgo. Mr. Rodrigo Uribe is the President of the Holding Grupo Mas X Menos and the Chairman of the Board and Chief Executive Officer of Superunidos. The Company plans to become public by listing new shares in Costa Rica’s or New York’s stock exchanges.
Project Cost Including proposed IFC investment
The total project cost is estimated at about US$125 million. IFC’s proposed investment is expected to be in the form of up to US$30 million in an A Loan and an equity investment of up to US$10 million.
Location of project and Description of site
The project will be located throughout the Dominican Republic, El Salvador, Honduras and Nicaragua, covering the main cities, the interior and the more rural areas of the four countries.
Description of Company and Purpose of Project
Corporación Supermercados Unidos, S.A. (“Superunidos” or “the Company”), is the largest supermarket chain in Costa Rica with 86 stores located in San José and in the interior of the country. Superunidos''three-year Project will involve the following components: (a) opening 38 stores in Nicaragua, 50 stores in the Dominican Republic, 48 stores in Honduras and 50 stores in El Salvador; (b) installing point of sale technology with product coding in each store and upgrading management information systems; and (c) training the new personnel to Superunido’s service standards, with an estimated total cost of US$125 million. The Company expects to benefit from higher margins (as a result of lower fixed costs, improved efficiencies and economies of scale), to streamline and run more technologically-efficient operations, and improve its competitive position, while at the same time preempting local and foreign competitors wishing to enter the proposed markets. IFC’s financing provides Superunidos with long-term funding which would otherwise be limited and expensive through other sources for companies in Central America. In addition, IFC could serve as a catalyst to encourage greater foreign investment in the Company. IFC’s participation would also improve the Company’s corporate governance through improved reporting and better management practices, while acting as an agent of change in its expansion plans. Superunidos'' Project is expected to have the following developmental impacts: (i) the Company’s expansion plans would assist in distributing to the less able population groups a wider variety of food and other basic necessity items (at lower or competitive prices) under cleaner and more hygienic conditions. By delivering products in the interior at the same price as in the capital cities, the Project would foster a more competitive environment, while reducing traveling time and distances for the more remote communities. The Project would also improve the distribution of food and non-food items in the four countries, by introducing best practice and modern retailing methods, and by bringing about technological improvements in logistics and distribution systems; and (ii) the Project will create about 2,700 jobs, primarily for women, contributing to social and economic growth in the more rural areas of the two countries. In addition, the Project would also provide uncommon employee-benefit packages and higher than average compensation rates. The expansion plans would also foster better academical standards and training, and create career opportunities for the Company’s employees and management, thereby improving the standards of living in the region in which it will operate.
Environmental Category and Issues
This is a category B project according to IFC''s environmental review procedure. Environmental, social, health and safety issues associated with the project include: site selection and site environmental and social conditions, liquid and solid waste treatment, use of appropriate refrigerants, fire protection, emergency response, and general worker health and safety. CSU stores will be located in commercial areas, and in middle and low income neighbourhoods. CSU is committed to undertake and provide IFC with details of future land acquisitions and to comply with World Bank policies and guidelines. Liquid effluents will be treated at municipal wastewater treatment plants, in those countries were municipal services are not available, CSU will design, construct and operate a wastewater treatment plant. Domestic solid waste will be collected by local authorities for final disposal. CSU has developed a fire and earthquake emergency plan, and will provide employees with appropriate training. IFC concludes that, the proposed project is being designed to meet Governments of Costa Rica, Nicaragua, El Salvador, Honduras and the Dominican Republic requirements, and World Bank policies, and environmental health and safety guidelines. IFC will monitor ongoing compliance with World Bank policies and guidelines during the life of the project by evaluating monitoring reports submitted annually to IFC by the sponsor and by conducting periodic site reviews during project supervision.
The is from the InfoShop.
| Date SPI sent to InfoShop | November 9, 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
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