Summary of Proposed Investment
Project Number
9615
Company Name
Agroindustrial Laredo S.A.A.
Date SPI Disclosed
Oct 25, 1999
Country
Peru
Industry
Agribusiness and Forestry
Status
Completed
Sector
Sugar and Confectionery
Department
Gbl Ind, Manufact, Agribus & Services
Environmental Category
B - Limited
Previous Events
Approved : Nov 30, 1999
Signed : Feb 1, 2000
Invested : Jun 21, 2000
Project Description
Summary Of Project Information (SPI)
| Project Name | Peru - Agroindustrial Laredo S.A.A. |
RegionLatin America and Caribbean
Sector
Project No009615
Projected Board DateNovember 24, 1999
Company NameEmpresa Agroindustrial Laredo S.A.A. (Laredo)
Technical Partner and/or Major Shareholders
Manuelita S.A., the second-largest sugar producer in Colombia and the most efficient, is both a majority shareholder in Laredo and technical partner to the company. Manuelita has been controlled by the Eder family for nearly 135 years.
Project Cost Including Proposed IFC Investment
Project cost is US$51.5 million of which IFC will provide up to US$10 million as an A loan and US$5 million as a C loan. The Netherlands Development Finance Company (FMO) will provide up to US$13 million in parallel A and C loans.
Location of Project and Description of Site
Trujillo, 560 km north of Lima, Peru. The site consists of 4,265 hectares of sugarcane fields and an existing sugar factory.
Description of Company and Purpose of Project
Empresa Agroindustrial Laredo S.A.A. is a former sugar cooperative converted to corporate form under the government''s program to reform the sugar sector. Laredo owns 4,265 hectares of agricultural land in Trujillo, Peru and grows sugar on 3,636 hectares. The company produces raw sugar from its own cane, and cane supplied by independent growers, in a 2,000 ton/day factory.
The project consists of: (i) renewal and replanting of 2,900 ha of sugar cane fields; (ii) rehabilitation/expansion of an existing sugar mill to process up to 3,000 tons/day of sugarcane equivalent to 73,479 tons of refined sugar and; (iii) repayment of overdue retirement obligations and other labor costs and past due loans from suppliers.
By assisting with the conversion of the company from a cooperative to a publicly owned corporation, IFC supports the government’s program to reform the sugar sector. IFC also fulfils its role in supporting private sector development by providing necessary financing (and mobilizing additional external funding from FMO) for the substantial investments the sector requires for rehabilitation and expansion of existing production infrastructure. The project will enhance agricultural productivity and improve management of natural resources. In addition, IFC enables productivity improvements within the sector by facilitating technology transfer to Peru from the better-managed Colombian sugar industry.
Environmental Category and Issues
This is a category B project according to IFC’s environmental review procedure. Key issues considered during appraisal included: site acquisition and management; pesticide use and Integrated Pest Management; sustainability of water supply and water rights; waste water treatment; air emissions from the sugar mill; solid waste management; hazardous materials use; retrenchment of workforce and social commitments; and occupational health and safety issues.
The project will not affect areas of ecological or environmental significance and there will be no economic displacement or resettlement. The sponsor will protect and conserve all sites of archaeological significance that lie within the project boundaries and will implement an integrated pest management program.
Exploitation of irrigation water is sustainable and abstraction will not adversely affect downstream users. Currently there is excessive use of water within the mill site which is discharged directly to adjacent fields as irrigation water. Additionally, filter cake and distillery waste are combined and discharged directly to an adjacent open watercourse without treatment.
Significant air emissions are apparent from each of the four boilers and the sponsor will replace all four boilers with a single new boiler (with appropriate pollution control equipment to achieve WBG requirements) by 2002. The sponsor has undertaken to install new equipment to address both air emission and waste water issues to IFC’s satisfaction.
The mill site contains large amounts of solid waste. The sponsor has begun to sort and dispose of this material and will recycle/re-use waste where possible. In instances where re-use is not possible, waste will be disposed of to local landfill. Several sources of hazardous material are evident and the sponsor has undertaken to ensure appropriate and safe use and disposal of all materials.
The sponsor has begun a program of retrenchment to reduce the labor force. This process has been undertaken in an open and transparent manner in accordance with Peruvian labor laws. The sponsor also acquired social assets (a hospital and three schools). The management and ownership of the schools have been transferred to government. The hospital will be transferred to the local health authority or privatized. The sponsor has undertaken to maintain and improve contracts with local cane out-growers through the development of legal contracts with local suppliers and to commit to the purchase of cane.
The mill site does not currently comply with WBG health and safety requirements and the sponsor has already prepared a detailed risk assessment of health and safety issues at the mill and will develop and implement an occupational health and safety plan acceptable to IFC during the project.
The is from InfoShop.
| Host country location of environmental documents | In several public and private institutions and offices including: Municipal Office in Trujillo Municipal Office in Laredo Universidad Nacional de Trujillo Rector: Dr. Guillermo Gil Malca Diego de Almagro 344 |
Date SPI sent to InfoShop October 25, 1999
“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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