GINSA II

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Project Number: 
NI3846A-02
Expected Consideration Date by the Board: 
10/07/2014
Date Posted: 
09/03/2014
Company: 
Ganadería Integral de Nicaragua, S.A. (“GINSA”)
Sponsoring Entity: 
Not applicable
Financing Requested: 
Up to US$50 million
Sector: 
Livestock and Poultry
Location: 
Villa El Carmen, Nicaragua
Country: 
Scope Objective: 

Ganadería Integral de Nicaragua, S.A. (“GINSA”) is a company related to Grupo Viz de México (“Sukarne,” www.sukarne.com). Founded in 2008, GINSA is located in the Villa El Carmen Municipality, approximately 35 kilometers from Managua. GINSA is a beef producer with finishing feedlots, a feed storage and processing plant, and facilities for transporting, handling, buying, and selling cattle.

The GINSA project consists of constructing, equipping, and commissioning a slaughterhouse with nominal capacity to slaughter 180,000 head of cattle annually. The project also includes expanding the corrals and the feed plant to handle inventory of up to 50,000 head of cattle. With this project, GINSA will consolidate its commercial position by becoming a Nicaraguan producer that has integrated the finishing, slaughtering and processing, sales, and export phases of beef production.

The IIC loan will consist of an A loan of up to US$5 million; a B loan from participating banks of up to US$25 million; and a C loan from Mexico’s Banco Nacional de Comercio Exterior, S.N.C. of up to US$20 million. This will be the IIC’s second loan to GINSA. The first IIC loan to GINSA was in 2012 for US$10 million.

Nicaragua is an important producer in the agribusiness sector in Central America. It runs a surplus in cattle production and beef exports. The IIC loan will complement foreign investment in Nicaragua, help create jobs, and boost an important sector of the domestic economy. Exports of beef and cattle—the second largest category of Nicaraguan exports—stood at more than US$228 million in the first half of 2014. Through GINSA, Grupo Viz continues to exchange information and experience with a number of players in the agriculture and livestock sector in Nicaragua, including both professional associations and entities associated with the Nicaraguan government.

Grupo Viz, with its Sukarne brand, is an integrated animal protein producer and Mexico’s largest beef producer, posting over US$400 million a year in exports to Japan, Russia, South Korea, the United States, and other international markets. Headquartered in Culiacán, in the State of Sinaloa, Grupo Viz has five production facilities in Mexico and a nationwide distribution and marketing network.

Environmental Review: 

Environmental and Labor Issues:

This is a category B project according to the IIC’s Environmental and Social Sustainability Policy because it could produce certain effects that may be avoided or mitigated by following generally recognized performance standards, guidelines, or design criteria. The main environmental and labor considerations related to the project are efficient resource use and pollution prevention, workplace and labor conditions, and community health and safety.

Grupo Viz has four plants in Mexico similar to the one being built in Nicaragua. The project appraisal included visits to GINSA in Nicaragua, as well as to a Sukarne plant in Michoacán, Mexico. The Sukarne plants in Mexico have a sustainability management system that includes policies, manuals, and procedures on health, safety, and the environment. For addressing these aspects, it has a corporate management structure with managers overseeing issues of environment and industrial safety, as well as local coordinators focused on each aspect in each plant who are responsible for implementing the corresponding environmental management and industrial safety plans. This arrangement will extend to GINSA’s slaughterhouse in Nicaragua, and it is already in place in its feedlot.
 

As an affiliated corporation, GINSA has the full backing of Grupo Viz and will implement the same good international practices as the group for managing environmental and occupational health and safety issues, as well as the group’s corporate responsibility program. GINSA’s existing operation complies with applicable Nicaraguan regulations, and its new facilities will do likewise. The IIC will require that GINSA have an environmental and occupational health coordinator to handle any such issues arising in connection with its operations and to ensure compliance with Nicaraguan regulations and IIC environmental and labor requirements.
 

Environmental Management and Permitting: GINSA has 250 corrals for finishing livestock. In order to reach a capacity of 50,000 head of cattle in its feedlot, the number of corrals must be increased to 550, for which purpose the permit granted by the Environment and Natural Resources Ministry (MARENA) in 2008 must be broadened. This is also required if the company is to increase the capacity of its livestock feed production plant. GINSA also has a permit for building a cattle slaughterhouse with capacity for 500 head of cattle per day, granted by MARENA in May of 2014. To obtain this permit, it had to submit an environmental impact study (EIS) and an environmental impact document (EID). These were then subjected to a public consultation process in the Villa El Carmen municipality in March of 2014. The corrals and other facilities for finishing the cattle, as well as the feed plant, are currently operating. The slaughterhouse is under construction.

As with the group’s plants in Mexico, GINSA will seek ISO 9001, ISO 14001, OHSAS 18001, and HACCP certification for the slaughterhouse.
 

Land Use: The project area, which lies outside any protected natural areas, has the features of a tropical dry forest ecosystem entirely given over to farming and livestock-raising activities. In the past, parts of the area were used as pasturelands for raising cattle and for farming activities. There is no population neighboring the land that could be affected by the project, although there are housing developments in the area of influence. GINSA has a land use permit from the Villa El Carmen Municipality for building the beef processing plant. It also has a permit from the National Forest Institute (INAFOR) to fell the number of trees necessary to build the project, as well as permits from the Energy and Mining Ministry (MEM) and MARENA to extract and use materials at the site.

Water Supply and Liquid Waste Management: GINSA has two working wells that provide water to its livestock operation and is authorized by the National Water Administration (ANA) to drill two more wells to supply the processing plant. Once these two wells have been drilled, the corresponding hydrological study has been performed, and the water quality has been tested, the corresponding permit for its use must be sought. The drilling was in progress during the site visit.
 

GINSA holds all necessary permits from other applicable authorities, such as the Livestock and Farming Ministry (MAGFOR), the National Forestry Agency (INAFOR), and the office of the mayor. MARENA will inspect the project facilities as it deems necessary, with or without prior notice, to verify compliance with applicable domestic regulations.

Finishing of the cattle takes place intensively in the corrals where the livestock are confined and given water and food. Cattle feed is produced in a plant on GINSA’s own premises. The wastewater generated during cleaning of the corral area and the feed plant, along with the storm water run-off that drains from the corrals, is channeled into the company’s wastewater treatment system. That system consists of a sedimentation pond and an 800 m canal that leads to an anaerobic lagoon, followed by a facultative lagoon and a biofilter. The wastewater is then discharged pollution free into a body of water. The treatment system has been approved by the Nicaraguan state water and sewer company (Empresa Nicaragüense de Acueductos y Alcantarillado, ENACAL) and MARENA. The company is required to monitor the quality of the end wastewater to ensure it complies with local regulations. However, since the plant was built, there has been less rain than average and the lagoons are not yet full, meaning the system has not yet discharged any wastewater.

The liquid effluents from the slaughterhouse will have high levels of BOD, COD, suspended solids, and fat. The treatment plant will use a system that operates similar to the one described above. It is currently under construction. The system does a separate pre-treatment depending on the origin of the waste. For the slaughterhouse, a gyratory screen will filter out solids; the by-product area will include a grease trap; and the corrals will have a hydrostatic screen and a sedimentor for handling their waste. These flows come together and proceed to a hydrolysis sink that can capture solids and fats, a hydrostatic screen, an anaerobic digester, a downflow filter, and two horizontal flow biofilters. The anaerobic digester will be covered to collect biogas, thereby allowing measurement of its generating capacity. The biofilters will use plant species adapted for that purpose and tested in similar treatment units.

The domestic wastewater from the slaughterhouse—an estimated 55 m3/day—will come mainly from staff washrooms, the laundry area, and the employee eating area. They will be sent for treatment to a septic tank equipped with an anaerobic upflow filter designed to hold one day’s worth of wastewater plus the amount of sludge estimated to be produced by one year of operation, followed by an absorption well. The wastewater must meet the standards established in Nicaraguan regulations.

Air emissions and noise: Paved roads provide access to the project site. During construction and in the unpaved corral areas, roads are watered periodically to keep down the dust kicked up by vehicles and machinery. GINSA is also implementing a reforestation program, planting native tree species to serve as natural barriers against dust and odor emissions and to mitigate the project’s visual impact.

While the slaughterhouse is operating, it will use bunker fuel for its steam boilers. The boilers are four-pass fire-tube boilers and must have mechanisms permitting the combustion to be controlled in order to maximize efficiency and reduce pollution. 

The noise level as experienced from surrounding areas must be ascertained once the plant is operating. However, given the remote location of the plant and the existence of hedges, the plant is not expected to have an effect on surrounding noise levels. Inside, it must be confirmed that the noise level does not surpass the acceptable limits for worker exposure. In places where it does, use of personal safety equipment will be necessary.

Solid and Semisolid Waste Management: The waste generated is mainly organic waste, most of it with a commercial value. GINSA will not have a fat and protein recovery plant at this stage of the project, although one is planned as a future project. In the meantime, another company (Promotora Agropecuaria San Pedro S.A.) has expressed interest in acquiring and processing all the organic waste generated. Likewise, the blood collected at the slaughterhouse is sold to another company (PROTENA). The manure from the corrals is used as organic fertilizer, and in the future, GINSA is going to install a composting plant similar to the ones found at the group’s operations in Mexico.

The waste that has no commercial value will be sent to the municipal dump. The Villa El Carmen Municipality must give its approval for this. Hazardous waste is handled by a licensed company.

Workplace Health and Safety: GINSA will apply Sukarne’s sustainability management system, which entails the identification of hazards, risk assessment, and establishment of process controls, as well as the establishment of goals, objectives, and health and safety programs. It also includes an emergency preparation and response program featuring spill prevention and control; hurricane, fire, and flood planning; and accident prevention.

The main risk at the slaughterhouse is leaks of ammonia, an irritant gas. To guard against this, the group uses the U.S. Occupational Safety and Health Administration’s “Process Safety Management” (PSM) method (OSHA-1926.119), which establishes procedures, design criteria, and auditing programs for handling of industrial hazardous materials. This method involves the worker as well as contractors and suppliers, and provides training and information and incorporates elements of detection and protection in the event of emergencies.  

The plant will have firefighting systems and first aid kits in different locations in case of accidents. The fuel tanks will be above ground and will be protected by berms with capacity to contain a volume equivalent to 110% of tank volume.

Labor Practices and Social Issues: GINSA is in compliance with Nicaraguan labor legislation. It currently has 100 people on its payroll, a number that will increase to 500 once the slaughterhouse is operating. Its workers receive all the benefits to which they are entitled by law and are paid more than minimum wage. All workers hired by the company are of legal working age as established by domestic labor legislation. There is currently no union, but any worker wishing to join a labor union is free to do so. GINSA actively participates in the community’s social issues by sponsoring sports (organizing soccer tournaments), improving infrastructure and the environment (repairing rural roads, reforestation programs), supporting health (preventative medicine and fumigation campaigns), and contributing to education (program to provide school children with computers, celebration of teacher appreciation day).

Monitoring and reporting: GINSA will prepare an Environmental and Social Action Plan (ESAP) satisfactory to the IIC to ensure compliance with domestic regulations and the IIC’s environmental and workplace safety and health guidelines. Among other issues, the ESAP will include an obligation to implement the measures indicated by MARENA in its environmental permit, as well as the environmental management program (EMP) included in the EIS. It shall also include the preparation of an annual report with information on the implementation of these commitments and the monitoring of environmental and workplace safety parameters.