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Zambeef Expn
Environmental & Social Review Summary

This Environmental and Social Review Summary is prepared and distributed 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 of Director’s decision. Board dates are estimates only.
Any documentation which is attached to this Environmental and Social Review Summary has been prepared by the project sponsor and authorization has been given for public release. IFC has reviewed this documentation and considers that it is of adequate quality to be released to the public but does not endorse the content.
Project number 31091
Country
Zambia
RegionSub-Saharan Africa
SectorAnimal Slaughtering and Processing
Department
Company nameZambeef Products PLC
Environmental category:B
StatusActive
Date ESRS disclosedMarch 30, 2012
Previous EventsInvested: July 31, 2012
Signed: June 7, 2012
Approved: May 16, 2012
View Summary of Proposed Investment (SPI), click here

OverviewCategory &

Applicable Standards
Key Issues

& Mitigation
Community/

Engagements
Client's

Documentation

Overview of IFC's scope of review
The first appraisal of Zambeef operations took place in 2009 in support of the initial investment (#29013). The main environmental, occupational health and safety, and social (EHSS) issues identified during that initial appraisal included: (i) weak internal controls to assess and manage environmental impacts and comply with national environmental, occupational health and safety (OHS) and food safety standards; (ii) food safety issues from weak implementation of Good Manufacturing Processes and microbiological contamination; (iii) hazardous materials transportation, storage, and use; and, (iv) resettlement and relocation issues. To mitigate these issues, Zambeef, with technical and financial assistance from Deutsche Investitions- und Entwicklungsgesellschaft mbH, Cologne, Germany (DEG), embarked on the development and implementation of a comprehensive Environmental and Social Action Plan (ESAP) based on IFC’s Performance Standards requirement and World Bank Group (WBG) Environmental, Health and Safety (EHS) Guidelines. In addition to this ESAP, a supplemental ESAP was produced after IFC’s due diligence process and agreed upon with the Company.

The environmental and social due diligence of this follow-on investment project focused mainly on evaluating progress made by Zambeef in implementing its ESAPs under DEG and IFC’s loan agreements. The scope of the due diligence for this repeat investment also comprised review of available corporate and project-level environmental and social documents, including ESAP implementation progress reports produced by independent consultants.
Project description
Zambeef Products PLC (“Zambeef” or the “Company”) is one of the largest agri-business companies in Zambia and the Southern African Development Community (SADC) region, involved in the production, processing, distribution and retailing of beef, chicken and eggs, pork, dairy products, edible oils, stock feed, flour and bread. The Company, which continues to grow through organic expansion and acquisitions, was successfully listed on the Alternative Investment Market of the London Stock Exchange in June 2011. In the same year, the Company acquired Mpongwe Farm in northwestern Zambia. Zambeef has also been listed on the Lusaka Stock Exchange since February 2003. The Company continues to roll out its West Africa expansion in Nigeria and Ghana, as well as developing its palm oil project in Mpika, Zambia.

The IFC investment (the “Project”) is to assist Zambeef with its three year developmental capital expenditure plan, including: 1) upgrading and expanding the Zamanita edible oils plant; 2) post acquisition expansion and upgrading of Mpongwe farm, including conversion of at least 500ha of rain-fed to irrigated to increase soya & wheat production; 3) expansion of processing capacity at Masterpork, dairy plant and poultry; and, 4) a new ruminants plant at Novatek feed mill in Lusaka.

Zambeef’s operations include:

Farming Division – Huntley, Sinazongwe, Chiawa and Mpongwe, and Palm oil plantation in Mpika;
Meat and Dairy – beef feedlots and abattoirs, chicken broilers and abattoirs, chicken layers, Kalundu dairy farm, and piggery and pig abattoir;
Manufacturing/Processing Division – Zamanita edible oils plant, Novatek stock-feed plant, leather and shoe plant, flour mill and bakery, and meat and dairy processing plants;
Retail Division – Zambeef outlets, Shoprite butcheries, Zamchick Inns, wholesale depots, and transport and distribution.

During the appraisal, the following Zambeef’s Zambia operations were visited: Mpongwe Estate in Ndola; Zambeef retail outlets in Kapiri, Kabwe and Lusaka; Huntley (Chisamba) Farm – the Company’s largest agro-processing complex - and Kalundu dairy farm; Zamanita – edible oils processing plant and Novatek stock feed plant in Lusaka; and Masterpork slaughter and processing facility on the outskirts of Lusaka.

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