Agripac S.A

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Project Number: 
EC3879A-02
Expected Consideration Date by the Board: 
09/22/2015
Date Posted: 
08/18/2015
Company: 
Agripac S.A.
Sponsoring Entity: 
Not applicable
Financing Requested: 
Loan of up to US$5 million
Sector: 
Fertilizers and Agricultural Services
Location: 
Guayaquil
Country: 
Scope Objective: 

Scope and Objective of the Project and IIC’s Participation:

Agripac S.A. is a leader in the manufacturing and marketing of agribusiness inputs in Ecuador specializing in agrochemicals, fertilizers, and animal feed. It has grown from an agrochemical marketing firm into a diversified enterprise with value-added products such as animal feed concentrates (for fish farming, livestock, poultry, and pets) and its own distribution network.

Armed with more than 40 years of market experience, Agripac has a large nationwide presence with over 150 sales outlets selling its products and providing support and advisory services to small and medium sized farmers and agribusinesses. Its innovative business development programs attest to the group’s management capability and its focus on supporting small farmers. Specific examples include its “la Escuelita” (or Academy) program for the recruitment of recently graduated young professionals; its financial services for small customers and farmers offered through Banco de Guayaquil’s “Banco del Barrio” program (a neighborhood banking network); its triangulation programs supplying inputs to small farmers growing corn and other crops in exchange for their agreement to sell crops to Agripac for use in the production of balanced feeds or pet products as part of its sales line.

The goal of this IIC operation is to finance part of the expansion of the feed production plant for the aquaculture sector and to provide it with working capital.

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 assessment and management of environmental and social risks and impacts; efficient resource management and pollution prevention; and workplace and labor conditions.

A previous operation with Agripac included on-site visits to the Laquinsa (pesticide formulation), Balanfarina (balanced feed production), Celtec (farm input manufacturing and repackaging), and Agrigrain (grain storage) plants. Other visits were made to AeroAgripac (crop-dusting company), the port terminal for fertilizer reception and handling, and selected distribution centers. As a result of the environmental and social assessment of that operation with the IIC, Agripac agreed to implement an Environmental and Social Action Plan (ESAP), which, thus far, the company has been implementing satisfactorily.

Assessment and Management of Environmental and Social Risks and Impacts: At its installations, Agripac has a comprehensive management system in place for managing environmental, occupational safety and health, and quality issues, which is certified under the following international standards: ISO 14001, OHSAS 18001, and ISO 9001. Agripac also has responsible care certification by Aproque (the Ecuadorian chemical manufacturers association) as part of a global initiative by the chemical industry to continuously improve its performance in the areas of health, safety, and environmental management and to promote open, transparent stakeholder communication. In 2014, Agripac’s Balanfarina plant obtained GLOBALG.A.P. certification.

The company carries out regular environmental compliance audits of its manufacturing facilities, in accordance with Ecuadorian environmental regulations. At the beginning of 2015, an environmental audit was successfully completed at the Balanfarina plant. At present, all Agripac’s facilities hold the appropriate environmental licenses. Agripac ensures its operations comply with applicable regulations and that it implements environmental managements plans which are audited by the Ministry of the Environment. As part of its project to expand the production lines and support infrastructure at its facilities, Agripac will be required to apply for and obtain a construction permit and to update the respective environmental license.

As per Ecuadorian regulations and the Stockholm and Rotterdam Conventions, Agripac does not market any pesticides whose production or use is restricted due to their toxicity or damaging effects on the environment. In accordance with the classification of pesticides recommended by the World Health Organization, Agripac does not formulate, repackage, or market any products classified in Class Ia (extremely hazardous). Class Ib (highly hazardous) products are repackaged and marketed by Agripac following all security measures required under applicable domestic regulations and by international good practices. All pesticides formulated, stored, marketed, or employed by Agripac comply with the Andean Community Regulations and Andean Manual Governing the Registration and Control of Chemical Pesticides for Agricultural Use (Andean Community Decision No. 436 and Andean Community Secretariat Resolution No. 630, respectively), as well as with the International Code of Conduct on the Distribution and Use of Pesticides developed by the United Nations Food and Agriculture Organization (ICCDUP/FAO).

Efficient Use of Resources and Pollution Prevention: Agripac does not foresee any need to expand its current capacity to treat industrial wastewater at its facilities as a result of the Project. The company’s plants produce a minimal volume of industrial effluents, most of which are associated with the cleaning of floors and equipment in its quality control laboratories. Laquinsa and Celtec have treatment plants in place to process wastewater which is subsequently used to water the grounds of these facilities or discharged into the Guayas River, in accordance with domestic regulations and the United States Environmental Protection Agency regulations on drinking water.

The operations performed in certain processing areas (milling and packaging) at the Balanfarina and Celtec plants generate particulate air emissions and organic fumes from chemicals. Agripac employs cyclone dust collectors to control such emissions. In addition, the company treats any chemicals prone to emitting organic fumes in closed booths with pollution control equipment. Agripac regularly monitors air emissions, air quality, and noise levels, the results of which comply with domestic regulations as well as the maximum exposure limits established by regulations of the United States Occupational Safety and Health Administration (OSHA) and the American Conference of Governmental Industrial Hygienists (ACGIH). The new production lines that will be installed under the Project will have air emissions control equipment. All wastes classified as hazardous, such as containers with agrochemical residues, are collected by authorized agents of the Ministry of the Environment.

Workplace and Labor Conditions: Agripac complies with Ecuadorian labor regulations and has internal workplace safety and health regulations approved by the Ministry of Labor Relations. The company provides its employees with work clothing and personal protective gear, the use of which is mandatory. Agripac conducts a health evaluation for all new workers and provides regular medical check-ups to monitor the health of its employees. All employees are registered with the Instituto Ecuatoriano de Seguridad Social (Ecuador’s social security administration).

There is no union of Agripac workers, but employees have the right to organize if they so choose. As part of its corporate social responsibility program, Agripac is committed to hiring workers with disabilities under agreements with government agencies, such as the National Council on Disabilities (CONADIS) and the Job Placement Service (SIL). In addition, Agripac provides technology transfer, technical assistance, and training services to farmers.

All Agripac’s facilities are outfitted with fire prevention and fire-fighting equipment, including smoke detectors, fire alarms, sprinkler systems, and fire extinguishers. To implement the proposed Project, Agripac will expand its current fire-fighting system to bring it into line with applicable domestic regulations.

Monitoring and Annual Reporting: Agripac will continue to implement the ESAP agreed upon with the IIC, in line with the standards cited herein. Throughout the project, the IIC will monitor the implementation of the ESAP, reviewing monitoring reports submitted regularly by the company and making field visits as part of the project supervision process.