Egyptian Food Company 'Faragalla'

Location:

Egypt

Project number:

47723

Business sector:

Agribusiness

Notice type:

Private

Environmental category:

B

Target board date:

14 Oct 2015

Status:

Repaying

PSD disclosed:

28 Aug 2015

Translated version of this PSD: Arabic

Project Description

The EBRD is providing a long-term loan of up to EGP 200 million to the Egyptian Food Company (“Faragello” or the “Company”) part of the Faragalla Group. The loan will be used to (i) partially refinance existing short-term debt (ii) finance permanent working capital requirements; the (“Project”).

Transition Impact

The transition impact of the project is expected to stem from two main categories: (i) market expansion through backward linkages to suppliers including supplier development and training and forward linkages to third party logistics providers and (ii) setting standards for corporate governance through implementation of improvements in the Company’s management and Board structures.

The Client

Faragallo is one of the leading Egyptian producers of juice, dairy and processed vegetables, amongst others. Faragallo is the largest company within the Faragalla Group, one of Egypt’s leading diversified food companies with activities in the juice, dairy, vegetables, meat processing, baked goods and other foodstuffs market segments currently employing around 6,000 people. The Group is owned by Mr. Mohamed Farag Amerand his family.

EBRD Finance

Up to EGP 200 million.

Environmental and social categorisation, impact, and mitigation

Categorised B (2014). Environmental and Social Due Diligence (ESDD) has shown that the Project and existing operations (juice, dairy, vegetable and meat processing and distribution) are associated with some environmental and social impacts although these are generally well managed by the Company. Some improvements are, however, required and as such an Environmental and Social Action Plan (ESAP) has been developed and agreed with the Company to fully align existing operations with the EBRD performance requirements PRs.

The ESDD showed that the Company has in place various certified management systems including ISO 9001 (quality), ISO 14001 (environment), OHSAS 18001 (H&S) and ISO 22000 (food safety) to appropriately manage potential E&S issues associated with its activities. HR provisions are generally in line with PR 2 requirements and the Company has in place various procedures to manage potential E&S risks in its supply chain. The Company demonstrates good performance with the management of emissions and effluents, as well as the storage and handling of small amounts of hazardous materials, associated with its activities. Internal H&S provisions are adequate although some improvements are required to better manage potential road safety risks associated with company and third party vehicle fleets. Food safety is managed through the ISO 22000 certified management system. To fully align the Faragalla Group of Factories (FGF) with the EBRD PRs an Environmental and Social Action Plan has been developed and has been agreed with the Company. Key ESAP actions include expanding the existing EHS management team; training of company security personnel in line with PR 2 requirements, development and implementation of a waste minimisation programme; development of a code of conduct for safe driving for company drivers, including training; and the implementation of an external grievance mechanism.

The Company will be required to provide reports on environmental and social issues and the implementation of the ESAP annually to the Bank.

Technical Cooperation

The Project will have a Technical Cooperation component focusing on (i) strengthening corporate governance, ii) improving sales, marketing and commercial functions, and iii) identify and implement cost reduction initiatives.

Company Contact

Nassr Abdel Salam – Managing Director, FARAGALLA Group
Email: nasr@faragalla.com
Phone: +2 03 459 2040
 

Business opportunities

For business opportunities or procurement, contact the client company.

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Email: procurement@ebrd.com

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Email: projectenquiries@ebrd.com

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Text of the PIP

Project Complaint Mechanism (PCM)

The Project Complaint Mechanism (PCM) is the EBRD's accountability mechanism. It provides an opportunity for an independent review of complaints from individuals and organisations concerning EBRD-financed projects which are alleged to have caused, or are likely to cause, environmental and/or social harm.

Please visit the Project Complaint Mechanism page to find information about how to submit a complaint. The PCM Officer (pcm@ebrd.com) is available to answer any questions you may have regarding the submission of a complaint and criteria for registration and eligibility, in accordance with the PCM Rules of Procedure.