Avícola Campestre S.A. de C.V.

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Project Number: 
ES3427A-01
Expected Consideration Date by the Board: 
10/05/2015
Date Posted: 
09/04/2015
Company: 
Avícola Campestre S.A. de C.V. (“Avícola Campestre” or the “Company”)
Sponsoring Entity: 
not applicable
Financing Requested: 
US$1,100,000
Sector: 
Livestock and Poultry
Location: 
San Miguel, El Salvador
Country: 
Scope Objective: 

The primary purpose of this IIC operation is to provide financing to build and equip a chicken house with capacity for 70,000 chickens at one of the Company’s farms.

Avícola Campestre is a Salvadoran company founded in 1998 that fattens chickens and processes, packages, distributes, and sells chicken meat. It currently has four farms where it has 19 chicken houses with a total capacity for 606,000 chickens for fattening. The Company has chicken processing plant with an installed production capacity of 3,420 chickens per hour (one shift).

Environmental Review: 

Environmental and Labor Issues:

According to the IIC Environmental and Social Sustainability Policy, this is a Category B project: potential environmental and social risks and impacts are limited to the project site, are largely reversible, and can be mitigated via measures that are readily available and feasible to implement in the context of the operation. The main environmental and social issues related to this project are: (i) management of liquid effluent; (ii) management of organic, solid waste; (iii) efficient use of resources; (iv) food safety; (v) biosecurity; and (vi) occupational health and safety.

Management of Liquid Effluent
All liquid effluent from the processing plant is routed to a central biodigestor. The effluent is then augmented with other organic waste products from the production process. These waste products include all of the chicken excrement from the new battery cage facility, as well as soy and corn powders left over from the processing of the chicken feed. The passive decomposition process within the biodigestor produces methane gas, which is fed back to the plant and used to fuel the boilers. As new water enters the biodigestor, the already processed water is pumped out of the biodigestor and used to spray-irrigate company-owned sugarcane fields. This processed water is tested regularly to ensure that it meets national standards for liquid effluents, including Norm NSO 13.49.01.06: Liquid Effluents Discharged to a Receptor Water Body. The process for cleaning the chicken houses is designed to minimize the quantity and nutrient load of liquid runoff. First, all organic solids are mechanically removed from the houses.  Then the houses are swept to remove most remaining solids. Only then are the houses cleaned with pressure washers. The effluent is then channeled to an absorption trench where it is filtered passively as it returns to the aquifer.

Management of Organic, Solid Waste
Between production cycles, all of the bedding material – which is composed entirely of rice husks – is collected, piled and covered long enough to allow internal temperatures to reach between 50 and 60 degrees centigrade – the temperature at which many microorganisms that are human or plant pathogens are destroyed. The treated material is then bagged and transported in covered vehicles to agricultural lands owned by Avícola Campestre, where it is incorporated mechanically into the soil to act as natural compost. Similarly, any chicken carcasses removed from the chicken houses are composted in dedicated composters – in accordance with good industry practice – and the resulting compost is incorporated into the Company’s agricultural fields. All of the chicken components that are not packaged and sold (e.g., feathers) are consolidated and further processed into a nutrient-rich meal – which is subsequently used as an animal feed additive.

Efficient Use of Resources
All water used in Avícola Campestre’s production processes is drawn from wells on company land. This water-use is, in all cases, authorized by the National Water and Sewer Administration (Administración Nacional de Acueductos y Alcantarillados – ANDA). Before issuing such an authorization, ANDA evaluates local water table dynamics and gauges the well to confirm that the planned abstraction of water will not affect the production of wells in the surrounding community.  All water used in the processing plant is passed through a biodigestor and ultimately used to irrigate sugar cane fields, minimizing the amount of well water that would otherwise be drawn for this purpose. 
All of the organic solids generated during the production and processing of the chickens are either recycled back into the production process (as meal), or into productive agricultural activities (as compost). The Company actively reforests the areas surrounding its chicken farms. The Company also maintains an additional 84 hectares of forest, certified as a protected area by the Ministry of Environment and Natural Resources (Ministerio de Medio Ambiente y Recursos Naturales). Finally, the biogas produced by the biodigestor and used to fuel the processing plant’s boilers accounts for nearly 27% of all energy consumed by the plant.

Food Safety
Workers and visitors entering the processing plant are subjected to controls to minimize the risk of food contamination. Controls include the use of gowns, hair nets and respirator masks, and the disinfection of boots and hands upon entry. The plant is physically divided to keep early process stages apart from the later, cleaner stages.  The plant is certified by the Ministry of Public Health (Ministerio de Salud Pública) and by the Department of Food Safety within the Ministry of Agriculture (Ministerio de Agricultura y Ganadería). Within the plant, the company implements a program of weekly sampling and testing for potential biological contaminants. Tests are conducted both at the company’s internal quality control laboratory as well as at external, certified laboratories. Avícola Campestre is held to the quality control standards of Walmart, one of its primary customers. 

Biosecurity
All Avícola Campestre farms are certified by the Ministry of Livestock and Agriculture. To obtain this certification, the Company has implemented a “prophylactic plan” which includes vaccination and sampling for various diseases, including Avian Flu.  Avícola Campestre on the corporate level is certified by the Ministry of Public Health.  

Occupational Health and Safety
Avícola Campestre contracts a specialized company to provide monthly pest control services. Although this service provider is responsible for the proper storage and handling of any potentially toxic chemicals used for these purposes, Avícola Campestre has agreed to ensure that these activities are carried out in accord with the IIC Environmental and Social Sustainability Policy. Workers involved in the milling and mixing of chicken feed are equipped with appropriate dust masks and protective eyewear. The Company records all accidents and incidents systematically, along with their root causes and remedies. The Company has a Risk Management Plan, the implementation of which is undertaken by various “brigades” and overseen by a central Occupational Health and Safety Committee. To join this committee, each member must be accredited by the national Labor Ministry (Ministerio de Trabajo y Previsíon Social).  The committee as a whole is accredited by the same ministry for having completed the requirements specified in the General Law for the Prevention of Risks in the Workplace (Ley General de Prevención de Riesgos en Los Lugares de Trabajo.) 

External Recognition
In 2010 the Company was recognized for outstanding performance by the National Center for Cleaner Production (Centro Nacional de Producción Más Limpia). Performance was measured in various thematic areas including the following four: optimization of water use; odor management; management, storage, and disposal of common and special solid wastes; and composting. In 2014 the El Salvadorian Industry Association (ASI), together with the United States Agency for International Development (USAID), officially recognized Avícola Campestre as a “Model Company” for its performance in the following six areas: legal compliance; corporate transparency; management of values and corporate ethics; capacity building and development of personnel; worker well-being; community relations; and energy management. Finally, in 2015 the Company received a “Diploma of Recognition” from the Municipal Environment Unit (Unidad Ambiental Municipal de la Alcaldía Municipal de San Miguel) for the Company’s “valuable support, commitment and collaboration for the preservation of our environment.”

Monitoring and Reporting
Avícola Campestre will prepare an Environmental and Social Action Plan (ESAP) satisfactory to the IIC to ensure compliance with domestic regulation and with the IIC’s Environmental and Social Sustainability Policy. The ESAP will include the following commitments: (1) to implement a robust Environmental and Social Management System (ESMS) aligned with good international practice (particularly as outline in IFC Performance Standard 1); and (2) to perform a review of existing environmental and occupational health and safety conditions across all aspects of the Company’s operations and commit to ensuring that these are aligned with IIC and World Bank Group standards.  Avícola Campestre will report to the IIC annually on the implementation of the Company’s ESMS and its compliance with local regulations and IIC policies and standards.