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| Summary of Project Information (SPI) |
| This Summary of Project Information 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. |
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| Project number | 22561 |
| Project name | Amaggi Expansion |
| Country | Brazil |
| Sector | Agriculture And Forestry |
| Department | Agribusiness |
| Company name | Amaggi Exportacao e Importacao Limitada |
| Environmental category | B |
| Date SPI disclosed | April 13, 2004 |
| Projected board date | May 15, 2004 |
| Status | Active |
| Previous Events | Invested: December 10, 2004
Signed: September 24, 2004
Approved: September 23, 2004 |
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| Description of company and purpose of project |
Amaggi Exportaçao e Importaçao Limitada (Amaggi or the company), an existing IFC client, is one of the leading soybean operators in the Mato Grosso state of Brazil. Brazil is the world’s second largest soybean producer and Mato Grosso accounts for 20% of soybeans produced in Brazil. Soybean production in Mato Grosso is expected to outpace the other regions and increase by 10% p.a. in the next few years. To maintain its market share, Amaggi aims to expand its origination activity, particularly to the east of Mato Grosso, where soybean production is growing, replacing other less profitable agribusiness activities.
The project involves the following components:
- the establishment of soybean collection centers;
- construction of silos with 250,000 tons storage capacity and
- refinancing a portion of short-term debt that is currently used to support Amaggi’s permanent working capital needs.
The company’s permanent working capital consists of soybean inventory and pre-financing provided to farmers in the form of inputs and cash.
The project will enable the company to do the following:
- lower its financing cost;
- sustain its market share;
- establish a presence in growth areas in the east of Mato Grosso.
Amaggi has played an instrumental role in promoting sustainable soybean cultivation practices in the Mato Grosso state. Pursuant to the first IFC investment, Amaggi has developed and successfully implemented an Environmental Management System (EMS) that fully complies with World Bank Group environmental and social guidelines. The EMS specifies procedures to ensure that no child labor is employed, no negative impacts to the natural habitats, indigenous communities are present in Amaggi’s own operations as well as the operations of third party farmers who receive pre-financing from Amaggi. |
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| Project sponsor and major shareholders of project company |
| Amaggi is 100% owned by the Maggi family via the holding company, Grupo André Maggi Participacoes (the “Maggi Group”). The Maggi family has been involved in the soybean business since the 1950s. The Maggi Group is involved in cultivation, origination, pre-financing of farmers and transportation of soybeans and power generation in Brazil. Both Amaggi and the Maggi Group is managed by professionals with extensive experience in the soybean industry. |
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| Total project cost and proposed IFC investment |
Total project cost is estimated at $125 million. The proposed IFC A Loan of $30 million will be used for the following:
- refinancing the portion of short-term debt used to meet Amaggi’s permanent working capital requirements and
- construction of the soybean silos and soybean collection facilities. |
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| Location of project and description of site |
| The company is located in the state of Mato Grosso, Center West Brazil. Amaggi originates all its soybeans from farmers located in Mato Grosso and Rondonia. Hermasa, the transportation arm of the group, undertakes transport services and shipment of soybeans and fertilizers. Hermasa has a barge terminal in Porto Velho, Rondonia and a port facility located in Itacoatiara, in the state of Amazonas. Additionally, Amaggi has two crushing plants, one located in Cuiaba, state of Mato Grosso, and the other in Itacoatiara, in the state of Amazonas. |
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| Project Development Impact and IFC's Role |
The project supports a company that is proactive and has responsible environmental and social practices that fully comply with the World Bank Group guidelines. Amaggi is also the largest source of employment in the regions it operates in. The company presently has 2,400 permanent employees and during the soybean harvest seasons employs up to 3,000 people.
Additionally, the project enables Amaggi to participate in the growth in the soybean industry in Mato Grosso and maintain market share in areas where it has competitive advantages. Amaggi’s present reliance on short-term credit to support its permanent working capital needs leaves the company vulnerable to volatility in the Brazilian credit market. The IFC loan will enable Amaggi to lower its financing costs and risks by meeting its permanent working capital requirements with long-term financing. Amaggi’s farmer pre-financing program currently benefits around 900 farmers and is expected to reach more farmers as Amaggi expands into new areas. In addition to receiving financing, these farmers are also required to adopt sustainable environment and social practices, thereby promoting the sustainable growth of the soybean industry. |
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| 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/or social impacts may result which, can be avoided or mitigated by adhering to generally recognized performance standards, guidelines or design criteria.
Amaggi has in place an Environmental Management System to ensure that its operations and the operations of the third party farmers that receive financing from Amaggi are compliant with the World Bank Group environment and social guidelines.
To view the environmental documents for this project, click here |
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| Location of environmental documents in locally affected community |
| The Environmental documents will be located in the following locally affected communities: Itacoatiara, Porto Velho, Rondonopolis, Sapezal. |
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| To contact the project company, please write to: |
Judiney Carvalho de Souza
Av. Presidente Médici, 4269
Cep 78705-000
Rondonópolis – MT,
Brazil |
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