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PT Garudafood Putra Putri Jaya
Environmental & Social Review Summary

This Environmental and Social Review Summary (ESRS) is prepared by IFC to disclose its findings and recommendations related to environmental and social considerations regarding potential investments. Its purpose is to enhance the transparency of IFC’s activities. For any project documentation or data included or attached herein that has been prepared by the project sponsor, authorization has been given for public release by the project sponsor. IFC considers that this ESRS is of adequate quality for release to the public, but has not necessarily independently verified all of the project information therein. It is distributed in advance of IFC Board of Directors’ consideration and may be periodically updated thereafter. Board dates are estimates only and this document should not be construed as presuming the outcome of the Board Directors’ decision.
Project number 33258
Country
Indonesia
RegionEast Asia and the Pacific
SectorF-AI - Other Food
Department
Company namePT Garudafood Putra Putri Jaya
Environmental category:B
StatusPending Signing
Date ESRS disclosedApril 12, 2013
Previous EventsApproved: September 17, 2013
View Summary of Investment Information (SII), click here

OverviewE & S Project

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Documentation

Overview of IFC's Scope of Review
PT Garudafood Putra Putri Jaya (“Garudafood,” “GPPJ” or the “Company”) is organized into three main business areas, Snacks, Biscon (biscuits and confectionary) and Dairy & Others. The Company owns and operates ten production plants (in five sites in Indonesia) and also has agreements to take products from eight contract manufacturers. These independently owned and operated contract or toll manufacturing sites vary in size, function they perform and also in the percentage of their output that is destined for Garudafood. For example, the flavored milk operation provides the majority of its output for Garudafood; other plants are very small with regards to contribution, may function solely as pilot plants or may not operate year round with respect to supplying Garudafood.

IFC visited three Company owned plants and a toll operation that produces flavored milk as such plants are considered to be within the project’s area of influence. IFC met with plant management responsible for production, Environmental and Social (“E&S”) issues and Human Resources (“HR”) at each of the four operations. In addition, IFC met with senior financial, operational, procurement, environmental and HR management at the Company’s Head Office in Jakarta.
Project Description
IFC is proposing an investment in PT GPPJ, an entity within PT Garudafood Beverage Jaya (“GFBJ”), with a senior A-Loan of US$25 million equivalent in Indonesian Rupiah. This financing will be used for capital expenditure, additional working capital requirements and improved financial flexibility.

Starting in 1979 with unbranded roasted peanuts the Company has become a market leader in Indonesia with a current market share of 61% for their peanut products. The Company has also expanded into additional food products such as biscuits, confectionery and flavored milk. Manufacturing involves relatively low risk operations such as receipt and storage of raw materials, drying and roasting, baking, general mixing, extrusion of filings into the baked goods and packaging and storing of finished products. Distribution of goods is the responsibility of another entity within GFBJ, PT Sinar Niaga Sejahtera (“SNS”), which will not receive funds under this investment.

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