Agrimo

completed

Summary Of Project Information (SPI)Project NameMozambique-Agrimo     RegionSub-Saharan AfricaSectorProject No007616Projected Board DateSeptember 30, 1996Company NameAgrimo Companhia Agro-Pecuaria de Moçambique, Lda.Technical Partner and/or Major Shareholders Agrimo is majority owned by Zamagri, S.A., a Portuguese company owned equally by Mantero, S.A. and Oceanus, S.A.Project Cost Including proposed IFC investment Total project cost is estimated at US$5.3 million and IFC is asked to provide an equity investment of US$0.5 million and a loan of US$0.8 million.Location of project and Description of site Agrimo will provide agricultural extension services to smallholder farmers in the Mozambican province of Zambézia and, more specifically, in the districts of Mopeia, Nicoadala and Morrumbala. Agrimo has purchased a warehouse, an office and staff housing in the town of Morrumbala from where it will coordinate its activities. A site for a cotton gin and for a small farm to produce cotton for seed will also be acquired in the vicinity of Morrumbala. Extension posts will be located in small towns near where farming will be concentrated. Corporate offices will be located in Quelimane and a representative will be based in Maputo.Description of Company and Purpose of Project Agrimo will provide agricultural inputs, assistance and a guaranteed market for cotton produced by 25,000 or more smallholder farmers in central Mozambique. The project concept is not new and has been implemented successfully by other companies in northern Mozambique. The price paid to smallholder farmers for cotton is established by the Government of Mozambique near the beginning of the growing season. Seed cotton, purchased from smallholders by Agrimo, will be processed at a gin to be built by Agrimo in Morrumbala. The Cotton will be sold to the local textile industry or exported, and the Cotton seed will be sold locally. The project will have a significant impact on the region in view of the civil war that prevailed for the past two decades. Most of the smallholder families are recent returnees from neighboring Malawi or from the safety of nearby villages and almost all live in extreme poverty. Agrimo will provide smallholder families with the means to diversify their risk of producing only traditional food crops and add an alternative source of income. IFC''s role is to provide scarce equity and term-loan finance to make the project a reality. The project is extremely important for the redevelopment of the area due to the large number of families that will benefit when the project is fully implemented.Environmental Category and Issues This is a category B project according to IFC''s environmental review procedure. Environmental issues associated with the project include agricultural extension services, waste disposal, worker exposure to dust, general employee health and safety, and fire protection. Mitigation measures will include provision of training in chemical handling and application procedures.The is August 15, 1996 from the Public Information Center.Date SPI sent to PIC August 8, 1996For Additional Information contact: Corporate Relations Unit -telephone: (202) 473-7711facsimile: (202) 676-0365Environmental documents for this project are available at http://www.ifc.org and from the World Bank InfoShop (http://www.worldbank.org/html/pic/aboutinfo.html).