Naranjillo Agroindustrias Sostenibles S.A. (NAS)
- Business model
PENDING CONTRACTING: the investment proposal has received final approval and now is entering into the contracting phase. This disclosure is made pursuant our disclosure policy and will remain on line during 30 days, after which it will be removed automatically.
Investment Name: Naranjillo Agroindustrias Sostenibles S.A. (NAS)
Region: Huánuco (Tingo Maria)
Sector: Cocoa (and coffee)
Client’s website: http://nasfoods.pe/
Total AgriFI Financing: Equivalent in USD of up to EUR 4,000,000
Environmental and Social Category: B
(A) high risk, (B+) medium high risk, (B) medium risk or (C) low risk
Naranjillo Agroindustrias Sostenibles (NAS), is a cocoa and coffee processing company, supplied by the members of an historic cooperative (Naranjillo Cooperative) created in 1964, striving to ensure a stable cocoa and coffee beans demand for the local farmers and fighting against irregular demand from intermediary traders paying low.
The cooperative faced past difficulties but is now engaged in a restructuring process to overcome this situation. An approved restructuring plan will enable the regional cooperative to continue trading beans while offering key advantages for its members and their families. The restructuring will also allow the cooperative as a shareholder of the new cocoa and coffee processing company, to benefit from its results and progressively reimburse its creditors.
Funding objective and impact:
To accompany the growth of a sustainable cocoa value chain processing organic cocoa near the production area to generate added value benefiting local population. AgriFI will lend the equivalent in USD of up to EUR 4,000,000 to Naranjillo Agroindustrias Sostenibles, for the company to increase its sourcing of organic beans from the Cooperative.
The relaunch of Naranjillo value chain following this triple bottom approach will contribute to sustainably revitalize the regional economy around the national parc of the Blue Cordillera, where the cooperative production area is located. (“Protection-Production approach”).
Why AgriFI wants to fund this project:
- Agroforestry conservation: Support a Protection-Production approach model benefiting both people and the planet, including the non-degradation of natural ecosystems and forests, organic certification, among other certifications of good environmental practices.
- Social and economic development: The project has a structuring effect on the cocoa value chain by offering a predictable demand through the cooperative, contributing to the socio-economic and cultural development of smallholders encouraged to develop and diversify their agricultural production, in a sustainable way.
- Additionality of AgriFI Financing: although the plant already exists, it is a new company in the agribusiness sector usually perceived as risky, meaning difficulties for the company with not yet trackrecord, to secure long-term financing from lenders.
Environmental and social rationale:
This proposed investment has been categorised (B).
Main risks are related to the operations of the industrial plant to make sure is run in consistence with good industrial practices and the preservation of trust with the members of the cooperative as well as other potential smallholders is not disrupted.
IFC Performance Standards 1 to 3 are triggered at the plan level. PS 6 might be triggered at the bean suppliers level.
The company is putting in place policies and procedures commensurate to the scale of the project and its potential impact on EHS and natural resources preservation.