Frutales del San Juan, S.A.

completed

Summary Of Project Information (SPI)Project NameNicaragua-Frutan     RegionLatin America and CaribbeanSectorProject No009143Projected Board DateJune 30, 1998Company NameFrutales del San Juan S.A. (Frutan)Technical Partner and/or Major Shareholders Frutan, a newly created Nicaraguan orange plantation company, will be a joint venture between IFC''s client, TicoFrut, the largest citrus juice producer in Costa Rica and Nicaraguan investors, who are mainly land owners and led by Mr. Antonio Lacayo, former Minister of Presidency of Nicaragua. Frutan will receive technical and financial support from Ticofrut and provide oranges to TicoFrut under a long-term supply contract. Ticofrut has been an IFC client since 1995 and is undertaking a second plant expansion program along with the Frutan project.Project Cost Including proposed IFC investment Project cost: US$10.5 million IFC A Loan: US$2 million IFC Equity: US$1 millionLocation of project and Description of site Frutan is located in southern Nicaragua, north of the Los Chiles border with Costa Rica, and 90 km from Ticofrut''s plant in Costa Rica. The oranges grown in the region have good qualities and are produced at competitive costs because of the site’s ideal geographical and climatic conditions and lower labor costs than those of orange growers in Costa Rica.Description of Company and Purpose of Project Frutan is being set up under the assistance of Ticofrut that needs additional raw material for the plant expansion thereby catalyzing Nicaraguan investors'' interest to better utilize their land. The project is expected to allow TicoFrut earlier harvests, create local employment and increase Nicaragua''s exports. Mr. Lacayo, the founder of Frutan and an owner of other plantations in Nicaragua, is putting together the group of Nicaraguan investors and arranging the project with Ticofrut. Environmental Category and Issues This is a Category B project according to IFC’s environmental review procedure because a limited number of specific environmental impacts may result from this project. The following potential environmental, safety and health impacts of the project were analyzed: land cultivation techniques; use and handling of pesticides and chemical fertilizers; storage and disposal of containers and outdated materials; and general employee health and safety, including training. The project will employ appropriate citrus grove farming techniques and will be managed by agronomists trained in all aspects of the operation. Pesticide use is very limited and only types of pesticides permitted by World Bank Group guidelines will be used. Workers will receive training in pesticide handling and application and in equipment operation and related safety measures.      The is from the Public Information Center.Date SPI sent to PIC      May 19, 1998“This Summary of Project Information is prepared and distributed to the public in advance of consideration of the proposed transaction by the Corporation’s Board of Directors. It is provided for the purpose of enhancing the transparency of IFC’s activities and should not be construed as presuming the outcome of IFC Board consideration.”For Additional Information contact: Corporate Relations Unit -telephone: (202) 473-7711facsimile: (202) 974-4384Environmental 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).