Arcor Exp

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.

Project number	26566
Company name	ARCOR S.A.I.C.
Country	Argentina
Sector	Food & Beverages
Environmental category	B
Department	Agribusiness
Status	Active

Date SPI disclosed	November 7, 2007
Projected board date	December 7, 2007
Previous Events	Invested: January 9, 2008 Signed: December 20, 2007 Approved: December 13, 2007

View Environmental & Social Review Summary (ESRS), click here

Overview

Sponsor/Cost/Location

Development Impact

Contacts

Attachments

Project description

Arcor S.A.I.C. (Arcor or the company) is one of the leading producers and distributors of candies, chocolates and cookies in South America. The project entails providing a corporate loan to Arcor to finance its capital expenditures program and replace maturing debt.

Anticipated development impact of the project

The proposed investment supports the further expansion of an Argentine-based South-South player, making a contribution to local economic development, through

- job creation as the Group increases its manufacturing capacity in existing plants, and
- incremental taxes for the government.

In Argentina, Arcor has more than 13,900 employees, with a substantial portion of them located in the interior of the country, including frontier provinces such as Catamarca, Entre Ríos and Tucumán. As several of its facilities are located in small cities, Arcor’s support is key for the development of its surrounding communities. Furthermore, the Group has developed more than 160 SMEs in Argentina to work as exclusive distributors, employing more than 2,500 salespeople. IFC will continue to partner with a group with a strong corporate social responsibility culture, which supports a variety of programs in education, training, health, culture, and research through diverse corporate initiatives, the Fundación Arcor (Fundación), and Instituto Arcor Brazil.

IFC's expected development contribution

The project is in line with IFC’s strategy to contribute to sustainable economic growth by supporting a competitive family-owned company to firm-up its core operations in Argentina and sustain its regional expansion. Arcor operates in a priority sector for Argentina and is largely export-oriented with South-South expansion plans. IFC is uniquely able to support growing companies operating under volatile financial markets. Also, through the B Loan program, IFC will be encouraging commercial banks to provide financing with improved terms.

Environmental and social issues - Category B

This is a category B project according to IFC’s procedure for Environmental and Social Review of projects because a limited number of specific environmental and social impacts may result that can be avoided or mitigated by adhering to generally recognized performance standards, guidelines, or design criteria. The review of this project consisted of appraising technical, environmental, health, safety and social information submitted by the project sponsor and subsequent field visits.

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