TFI TAB Gida Yatirimlari

Location:

Turkey

Project number:

48420

Business sector:

Property and tourism

Notice type:

Private

Environmental category:

B

Target board date:

20 Jul 2016

Status:

Disbursing

PSD disclosed:

17 Aug 2016

Translated version of this PSD: Turkish

Project Description

The EBRD invested US$ 50 million in preferred stock of Turkey-based TFI TAB Gida Yatirimlari A.S, the leading quick service restaurant operator in Turkey. The Bank invested alongside Goldman Sachs and an investment vehicle advised by Credit Suisse Special Investments Group.

Project Objectives

The new financing will help TFI roll out new restaurants as well as expand their supply chain and implement resource-efficiency measures.

Transition Impact

The Project is expected to contribute to the transfer of skills, particularly to young people, as well as improved standards of sustainability in restaurants. Working with Turkish educational authorities and industry associations, TFI will contribute to developing national occupational standards for the fast-food industry. This will strengthen the employability of young people and support the long-term evolution of careers in the fast-food and hospitality sector.

In addition, the company will adopt sustainability guidelines for its existing and new restaurant openings in Turkey. Sustainability guidelines will incorporate best international industry practices related to advanced resource efficiency techniques, and demonstrate the viability of such technologies for the food industry in Turkey,. setting up an example for other market players.

Client Information

Turkey-based TFI TAB Gida Yatirimlari A.S (TFI) is incorporated in Turkey.
TFI runs over 1,500 restaurants and is the largest Burger King master franchisee globally with exclusive operating rights in Turkey and China. In Turkey, the company operates five brands: Burger King, Popeyes, Sbarro, Arby's its own Usta Donerci. The company also owns and operates bread, potato and meat processing plants which are part of its supply chain.

EBRD Finance Summary

US$ 50 million subscription in the company's preferred stock issuance.

Total Project Cost

Total preferred share issuance was US$ 150 million.

Environmental and Social Summary

Categorised B (2014 ESP). The Bank's finance for the Company's expansion of its processing plant in Turkey and the restaurant network will have specific environmental and social issues which can be addressed by adequate mitigation measures. The Company currently operates 5 restaurant brands including Burger King, a meat processing plant, salad packaging plant, bread factory, warehouse/ logistics facility and potato processing plant with a total of approximately 14,200 employees in Turkey.

The Bank's Environmental and Social Due Diligence (ESDD) involved a review of the completed ESDD Questionnaire and other relevant documentation such as supplier audit results, environmental
permits plus discussions with the Company management. In addition, there was an independent audit of the Company's meat processing facilities, review of Labour, Environmental, Health and Safety (LEHS) issues. The ESDD for the Company's Chinese operations was reliant on an examination of the Company's environmental and social risk management requirements applied to their restaurant operations in the country.

ESDD showed that the Company's facilities are in compliance with relevant national LEHS requirements, with potential improvement in certain areas. Human Resources (HR) procedures including written contracts, non-discrimination and equal treatment, a policy not to hire underage workers are in place in accordance with Turkish law. ESDD identified the need to define a clearer policy and instructions about the working conditions for young workers and pregnant employees, provision of additional H&S trainings to all staff and to introduce an enhanced formal employee grievance mechanism. The Company does not have a corporate level LEHS policy or systems and instead, each function operates under its own policy and operational requirements. The Company manages these issues at each of the operating entities by geography. A consolidation of these systems at the holding level will help standardization and consistency.

All of the Company's production lines have been audited twice a year by third party auditors against Burger King's global food safety requirements in line with good international practice, and the most recent audits in 2015 confirmed satisfactory food safety performance. A gap analysis between Turkish animal welfare law and EC Animal Welfare Directives was also carried out. At the time of the audit (June 2016), the newly constructed meat plant was still being commissioned and not fully operational, however the audit examined that the infrastructure and buildings of the meat facility are compliant with EU standards.

To structure the project to ensure adequate environmental and social risk management systems in compliance with EBRD Performance Requirements ("PRs") the Environmental and Social Action Plan includes the following: to develop written EHS supplier and contractor management policies at the corporate level; assign a Corporate EHS manager to implement and monitor EHS, supplier and contractor management systems in line with the Banks PRs across the Company including acquisitions/operations in China; to benchmark among the group HR teams to implement the best practice on HR in line with PR 2 and complete OHS risks assessments in the workplace; and an animal welfare audit for the new meat plant and animal welfare training to be align with the EU requirements. The Bank will carry out monitoring of the project by site visits, if required, and reviews of annual environmental and social reports.

Non-technical Summary

Technical Cooperation

Technical Cooperation funds will be provided (i) by the Inclusion Technical Assistance Framework for the assessment of Company's skills specifications and training standards in relation to the development of national occupational standards in the fast food sector; and (ii) by the Regional Framework for Sustainable Resource Efficiency in Turkey, funded by the EU IPA Fund, for the identification and assessment of advanced sustainable energy and resource efficiency opportunities across the Company's infrastructure.

Company Contact Information

Ekrem Özer, Chief Financial Officer
ekremozer@tabfoods.com
+ 90 212 310 48 99
Dikilitas 351; Mah. Emirhan Cad., No:109 Atakule, Besiktas, Istanbul, Turkey

Business opportunities

For business opportunities or procurement, contact the client company.

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