Nidera-COFCO

completed

Nidera is a major international agribusiness and trading company with an annual turnover of USD17 billion. The firm, which was established in Rotterdam (The Netherlands) in 1920, focused its early commercial activities on grain and food stuffs. Today, the company manages its operations in 21 key countries from its headquarters in Rotterdam and distributes its products to more than 60 countries worldwide. Nidera is an integrated agribusiness with a presence in every link of the value chain and two decades of experience in the development of seeds. Nidera seeds, which have boosted yields in all of the agricultural production areas of Argentina, are also exported to 15 other countries. The company produces, sells, and distributes leading hybrids and varieties of five of the world’s main staples (wheat, corn, soybeans, sunflower seeds, and sorghum) as well as comprehensive range of nutrients and crop protection products. Nidera also supplies the world market with unrefined vegetable oil (crude soy oil) and vegetable by-products as well as producing high-quality vegetables oils that are packaged and marketed under proprietary brand names. Nidera has built an extensive network of in-country elevators, storage assets, processing facilities and port terminals in South America, Europe and USA. Most assets are wholly-owned, while others are partially owned or through joint ventures or minority stakes. Nidera also has signed a number of long term throughputs agreements with strategically located terminals and storage companies in order to further facilitate its trading business. Its operational footprint is mostly concentrated in South America, especially in Argentina and Brazil, as these two countries are among the world’s major producers and exporters of grain and oilseeds, trailing only the USA. In fact, more than 50% of Nidera’s industrial, seed, and elevators facilities are located in Argentina. Nidera is seeking to launch the second phase of an expansion plan (started in 2009) to continue to grow its grain/oilseeds origination and infrastructure platform in Latin America (Brazil, Argentina, Paraguay, and Uruguay), Eastern Europe (Russia, Kazakhstan, and Romania) and North America (U.S.) (the “Project”), and thus seeking capital increase followed medium to long-term loans. The proposed IFC investment is an equity of about US$65 million in an investment holding company (HoldCo.) to be incorporated to house COFCO’s 51% stake in Nidera that it has entered into agreement to acquire and subscribe for (US$350 million primary shares). IFC will invest alongside COFCO (the leading agribusiness group in China), Hopu (a Chinese private equity firm) and other international investor(s) in this leveraged HoldCo. IFC will have about 5% effective indirect shareholding in Nidera.Identified applicable Performance StandardsWhile all IFC’s Performance Standards (PSs) are applicable to this investment, IFC’s environmental and social due diligence indicates that this investment will have impacts which must be managed in a manner consistent with the following Performance Standards:- PS1: Assessment and Management of Environmental and Social Risks and Impacts- PS2: Labor and Working Conditions- PS3: Resource Efficiency and Pollution Prevention- PS4: Community Health, Safety and Security- PS5: Land Acquisition and Involuntary Resettlement- PS6: Biodiversity Conservation and Sustainable Natural Resources ManagementIssues related to PS7: Indigenous Peoples and PS8: Cultural Heritage are not expected with this investment for the following reasons: there is no presence of Indigenous Peoples or known cultural artifacts within the company’s operational footprint. In the event that issues anticipated by these PSs arise, Nidera will promptly inform IFC. Screening and assessment of these issues against PSs requirements will be done through the Company’s E&S management system (ESMS).