Agrisouth (Chile)

completed

Summary Of Project Information (SPI)Project NameChile-AgrisouthRegionLatin AmericaSectorProject No004930Projected Board DateApril 3, 1997Company NameAgrisouth (Chile) S.A.Technical Partner and/or Major Shareholders Agrisouth (Chile) is wholly owned by Mahammed Abdallah Sharbatly Corporation (MASC), a Saudi Arabian fruit trader. MASC is a leading fruit trader (importer and wholesaler) in Saudi Arabia with a market share of more than 40%.Project Cost Including proposed IFC investment Project Cost: US$ 56 million, including working capital and interest expenses during construction. Proposed IFC investment: an A loan of US$ 10 million; B laon of US$ 5 million for the account of participating banks.Location of project and Description of site The Project is located in agricultural land in the Province of Linares, approximately 300 km south of Santiago. The plantations are located near the towns of Colbun and Yierbas Buenas, while packing and storage facilities will be located 25 km from the plantations, near the town of San Javier. Description of Company and Purpose of Project As part of its vertical integration strategy to reduce intermediary costs and secure good quality fruit, MASC began acquiring land in Chile in 1991 to develop the Project. The orchards will mainly produce red apples to be exported to Saudi Arabia, where the Sponsor is the market leader. Red apples are the preferred variety in the Middle Eastern market. The Project is located in a region whose climate is ideal for growing well-colored red apples, which command a significant market premium. At completion, the Project will ensure permanent employment for 450 workers, plus additional seasonal employment during harvesting, packing and shipping for 2,000 workers, of which 400 will be employed for approximately seven months per year. This employment creation will take place in Chile’s VII Region, where poverty has been estimated to affect 50% of the rural population. The Project will introduce new agricultural techniques such as high density planting and tree growth management, so needed currently by the Chilean fruit sector to maintain its cost competitiveness.Environmental Category and Issues This is an environmental review category B project. Environmental, health and safety issues include land use, air emissions, liquid effluent treatment and discharge, solid waste disposal, use of refrigerants, pesticide handling and application, fire prevention, and general employee health and safety. Environmental reports submitted by the Company indicate that the project will meet World Bank guidelines.The is from the Public Information Center.Date SPI sent to PIC March 3, 1997For 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).