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Summary of Proposed Investment
This Summary of Proposed Investment is prepared and distributed to the public in advance of the IFC Board of Directors’ consideration of the proposed transaction. Its purpose is to enhance the transparency of IFC’s activities, and this document should not be construed as presuming the outcome of the Board decision. Board dates are estimates only.
PRODUCTOS NATURALES DE LA SABANA S.A. - ALQUERIA
Date SPI disclosed
February 1, 2010
Projected board date
March 4, 2010
Invested: December 6, 2010
Signed: June 29, 2010
Approved: June 28, 2010
View Environmental & Social Review Summary (ESRS),
Productos Naturales de la Sabana S.A. Alqueria (“Alqueria” or the “Company”) is the third-largest dairy company in Colombia. The Company processes milk and its sub-products into a wide range of dairy products such as UHT milk, flavored liquid milk, cream and yoghurt – through a JV with Danone -- as well as fruit beverages from concentrate.
The proposed IFC investment (the “Investment”) is an amortizing A-Loan of up to $15 million and preferred shares of up to $5.0 million in favor of Alqueria. The Investment will help the Company implement its 2010 - 2012 investment program, involving: (i) expanding production capacity across plants; (ii) incurring capex aimed at gaining efficiencies and cost reduction; and (iii) increasing/generating incremental working capital.
Project sponsor and major shareholders of project company
Founded in 1959 by Mr. Jorge Cavelier, Alqueria is currently 100% owned by the Cavelier family (the “Sponsor”).
Total project cost and amount and nature of IFC's investment
The total Project cost over the 2010 – 2012 period is estimated at $36 million. IFC is considering providing the Company with a $ 15 million A-Loan and up to $ 5.0 million in preferred shares.
IFC investment as approved by Board
20 million (USD)
IFC Investment (million USD)
* These investment figures are indicative
Location of project and description of site
With a production capacity of 317mn liters/year, Alqueria operates 3 production plants in the 3 main cities of Colombia: Cajica (near Bogota), Cali and Medellin. In addition to these, it also owns a distribution center in Bucaramanga. The proposed investment will involve all 4 plants.
Anticipated development impact of the project
IFC will be supporting the continued growth of one of Colombia’s leading agribusiness companies in terms of employment and linkages through the value chain. It will improve Alqueria’s competitiveness in the production and commercialization of dairy products, helping the Company increase its reach in the interior of Colombia.
There are specific developmental impacts associated with the investment program, which are summarized below:
Employment: Alqueria’s improved performance will safeguard employment opportunities in rural areas throughout the country.
Farmers linkages: The Company sources its milk from direct and indirect farmers throughout the country (23% are located in Colombia’s frontier regions). As a consequence of the Investment Program, Alqueria will further develop milk production and therefore enhance and stabilize farmers’ incomes and increase hired employment on dairy farms.
IFC's expected development contribution
IFC is expected to play a critical role and contribute positively to the project by supporting a locally-owned company by providing long-term financing. IFC is uniquely able to support growing companies operating under volatile financial markets. Overall, IFC’s involvement in the Investment Program will enable Alqueria to (a) improve product quality and safety standards enabling the Company to keep diversifying into new products; (b) benefit from the implementation of IFC’s environmental and social performance standards; (c) improve its corporate governance and financial transparency; and (d) maintain its competitive position by reducing costs. Finally, the proposed investment would also improve the risk profile of a local player in the dairy industry by strengthening its balance sheet, and provide a valuable Stamp of Approval, as the Company considers a possible public listing in the near to medium term.
Environmental and social issues - Category B
This is a Category B project according to IFC’s Procedure for Environmental and Social Review of Projects as the project has no elements with diverse, unprecedented negative social or environmental impacts. Overall company organization and roles and responsibility for environmental, OH&S and social issues including community engagement were deemed to be comprehensive and the existing management program judged to contain the elements of a functioning, practical management system that meets IFC’s requirements. The company has comprehensive policies regarding human resources management; overall relationship of company and workers (including contractors) is well defined, communicated and seen to be cordial. Environmental management is well integrated into operations. Mitigation measures had been either proposed or were already being implemented. No issues involving the supply chain were observed. Community engagement includes many educational, nutritional and employment-based programs which the company supports on a local, regional and/or national basis.
For inquiries about the project, contact:
Contacto Alquería, Sara Baena
Cajica, Km 5 via Tabio ; T
elefono: ((571) 4887000; Fax : (571) 488700 ;
E- mail: firstname.lastname@example.org
For inquiries and comments about IFC, contact:
General IFC Inquiries
IFC Corporate Relations
2121 Pennsylvania Avenue, NW
Washington DC 20433
Local access of project documentation
Project information will be made available on company’s website and on the gates of company’s headquarters:
Cajica, Km 5 via Tabio
Tel: (571) 488 7000
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