ETC India

completed

The proposed investment is a US$ 30 million IFC A Loan of 5-year tenor in India’s largest pulses processing and marketing platform, ETC Agro Processing India Private Limited (“ETC Agro” or the “sponsor” or “company” or “ETC Pulses”), to support its pulses milling expansion in Kolkata, India (the “project”). ETC Agro is a 60% subsidiary of ETC Group (“ETC Group” or “ETG”), one of IFC’s key clients in Africa. Founded in Kenya in 1967, ETG (see www.etgworld.com) is one of the largest agricultural conglomerates in Africa. ETG’s footprint expands across sub-Saharan Africa, North America, Europe, the Middle East and South East Asian countries. Annually, ETG moves an approximate six million metric tons of agricultural commodities (such as cashews, various types of oilseeds, sugar, coffee, a variety of pulses, wheat, fertilizer, rice, maize and sesame seeds) around the world and directly employs more than 7 000 people globally. ETG is one of the major suppliers of inputs to ETC Agro operations in India.   IFC has had a long history of investment with ETG. See for example, “Export Trading Group”, Project no. 28472, disclosed in October 2009, at: https://disclosures.ifc.org/#/projectDetailESRS/480 and “ETC Group”, Project no. 32863, disclosed in February 2013, at:http://www.ifc.org/ifcext/spiwebsite1.nsf/ProjectDisplay/ESRS30568 Over the last couple of years, the performance of ETG with respect to environmental and social management was judged to be in need of improvement in its African operations; however, recent developments, including the hiring and training of a cadre of E&S supervisors, now placed throughout the Group’s African operations, is seen as a positive development that has resulted in an overall improvement of E&S performance to a satisfactory level, as confirmed during an IFC supervision visit conducted in February 2017.Prior review of ETC Agro operations in India, as part of supervision activities associated with IFC’s previous investments in ETG, confirmed that its Indian operations were well run, and staffed with competent E&S and production professionals and that E&S risks and impacts were few in number and well managed in compliance with the local regulatory requirements and IFC Performance Standards.  The proposed project entails final construction of a cluster of four pulses milling plants in the Port of Kolkata (formerly Calcutta) in an area zoned for green business activities such as grains milling, tea packing, etc. The land upon which the mill now stands is situated adjacent to other areas of the port used for warehousing pulses. Processing inputs such as Yellow Peas (Watana) & red lentils (Masoor Dal) involves the receipt (delivered by barge to the Kolkata operation), then cleaning, hulling, drying, splitting, sorting, polishing (as needed depending on the desired attributes of the finished product), and finally packing them. Ostensibly a dry mechanical process, the processing is practically without waste as all of the incoming food material is turned into useful products of one kind or another. Other key inputs are electrical power to run the milling equipment and to move the Yellow Peas and lentils around the plant.The project construction is nearing completion. Major civil work has been completed and milling has been already ongoing on 50% of entire installed capacity. Additional small scale construction is on-going that includes a packaging building, permanent offices, warehouse, and worker accommodation.