Jamaica Broilers Group Limited

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Project Number: 
JA3351A-03
Expected Consideration Date by the Board: 
06/30/2015
Date Posted: 
05/28/2015
Company: 
Jamaica Broilers Group Limited (JBGL)
Sponsoring Entity: 
Not applicable
Financing Requested: 
Up to US$6 million
Sector: 
Livestock and Poultry
Location: 
Saint Catherine Parish, Jamaica
Country: 
Scope Objective: 

This operation consists of a revolving credit line to finance JBGL’s permanent working capital needs. The credit line will finance mainly inventory and account receivables related to the poultry supplier chain. This is the third IIC loan to Jamaica Broilers Group Limited (JBGL). The first and second IIC loans were fully paid-off in 2014. The first and second IIC loans were made in 2009 and 2010 respectively.

JBGL is an integrated leading poultry producer in Jamaica. Its operations range from the rearing of poultry for fertile egg production; to broiler grow-out and feeding including production of feedstock for its own operations and third parties; to broiler processing, and selling and distribution. JBGL is a Jamaica-based company listed on the Jamaica Stock Exchange. It was founded in 1958 as a poultry company and it has evolved into a group of more than twelve subsidiaries.

This line of credit to finance permanent working capital needs will provide financial stability to JBGL operations. It is expected that more than 150 farmers that grow chicken into broilers will benefit from this operation as part of the sale of their chicken production to JBGL.

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.

JBGL is an industrial group oriented towards poultry production and processing. The Group comprises the Best Dressed Chicken Hatchery, the Best Dressed Chicken Processing Plant (poultry processing plant), the Best Dressed Feed Mill (manufactures Hi-Pro Feeds) and Hi-Pro Ace Supercenter (commercializes of farm supplies). The processing plant has a cogeneration plant that uses diesel engines to generate electricity and recovers waste heat for steam generation. In 2012, a further processing unit was added to the processing facility.

Environmental and Social Management. Several of the companies in Jamaica Broilers Group have obtained international certifications for environmental management and quality control. The processing plant is ISO 14001 certified in environmental management system, ISO 9001 in quality management systems as well as HACCP (Hazard Analysis and Critical Control Points); the feed mill is also ISO 9001 certified. The surveillance audits for ISO 14001 and 9001 for the processing plant and ISO 9001 for the feed mill were conducted in January 2015 with successful results. An Environmental Management System Manual for the processing plant is in place. In June 2014 the Group entered in an agreement with a consultant company (A1 Solutions) to develop an Energy Management Program based on ISO 50001. The expected outcomes of this study include cost effective ways to reduce energy costs and consumption and analysis of options for the substitution of the existing diesel generators that will require significant maintenance in the near future.

Quality Control. Workers receive basic hygiene training and possess food handlers permit as required by the Ministry of Health for the handling of poultry and other food products. The dress code and hygiene at the facilities was observed to be adequate as workers are required to wear clean uniforms and footwear before commencing work, as well as to disinfect footwear and hands before entering the facilities. The chicken processing facility and the hatchery also have sanitation programs, which are critical to the success of these operations. In addition, periodic laboratory tests including swab tests are done in several areas of the chicken processing plant and hatchery to assess the quality of the cleaning job being carried out.

Animal Welfare. The chicken processing plant, hatchery, and farms have an animal welfare program in place to ensure that all workers are trained in appropriate handling of the chicks and chickens. In addition, the Company’s clients audit the facilities to determine whether the birds are handled humanely and any suffering is minimized. For instance, the Company ensures that birds are housed on farms in shelters that are clean, well ventilated, and that the birds are free to roam through the shelters. The birds are caught and transported carefully, minimizing injury. Stunning equipment is maintained to confirm that birds are relaxed and not frightened prior to slaughter, and slaughter equipment is maintained to ensure that birds are slaughtered quickly.

Waste Management. One of the main sources of waste, which consists of offal and feathers from the chickens, is the chicken processing plant. This waste is separated from the waste stream and collected by a third-party contractor that removes and transports it to the government approved disposal site. It is buried on a daily basis in accordance with the National Solid Waste Management Authority protocol. The waste at the hatchery, which consists primarily of eggshells and excrement, is similarly collected and transported to an authorized off-site landfill. The company’s waste management practices have reduced the odor to negligible levels. The other kind of waste, blood from the chickens is drained and carried via cesspool truck off site to a waste treatment facility operated by the National Water Commission. The Group will continue to ensure that the waste management practices at all of its companies are in compliance with the requirements of the National Solid Waste Management Authority, as well as international best practices.

Liquid Effluent. The Group has wastewater treatment systems in place for its facilities. New environmental regulations approved in Jamaica required the recertification of the existing treatment systems for the companies of the Group. The chicken processing plant submitted a wastewater compliance plan to the National Environment and Planning Agency (NEPA) with a list of activities and expected results to achieve discharge effluent standards. The projected improvements include the reconstruction of the inlet and outlet infrastructure to the stabilization ponds, the redesign of primary clarifier stage including an equalization tank among other improvements aiming to increase the retention time and improve flow regulation. The expected outcome is an overall reduction in the contamination parameters, such as organic load (BOD and COD) and suspended solids (TSS). The proposed modifications were under construction during IIC’s visit. The treated liquid effluent from the wastewater system is used for irrigation. The treatment system includes chlorination and filtration systems before the discharge to the irrigation channel. An enhancement in the chlorination process is also being carried out. The company expects to be certified once all the systems are operational. The feed mill applied for recertification according to the new regulations and obtained the new licenses by the end of 2014.

Air Emissions. The majority of the power supply for the companies that are part of the Jamaican Broilers Group comes from the national grid, with the exception of the chicken processing plant, which obtains energy from the adjacent cogeneration plant. The cogeneration plant consists of three medium speed diesel engines (rated at 5 megawatts each), two Caterpillar engines for stand-by purposes, one heat recovery steam generator (HRSG) that utilizes the hot gases from the engines to produce steam for the chicken processing facility, and an auxiliary boiler. The emission sources from the cogeneration facility include the oil-fired boilers, the medium speed diesel engine, as well as the stand-by diesel generators.

Jamaica Broilers Group hired the services of an air quality expert, Air Quality Consultants Limited, to ensure the maintenance of an air quality program consistent with the requirements of the licensed companies (the processing plant and the feed mill). The company has successfully implemented a robust monitoring program in keeping with NEPA requirements. Monthly air emissions monitoring reports are submitted to the Agency. The visual emissions readings continues as outlined in the Air Quality Monitoring Plan, the readings are within the limits. The team of visual emission observers is re-trained and re-certified every 6 months as required by the air quality guidelines.

Emergency Preparedness and Response. The Group’s overall emergency preparedness and fire prevention programs were observed to be adequate. All companies within the Group have Fire Safety Certificated issued by the Jamaica Fire Brigade. The hatchery, processing plant and feed mill are registered under the Factories Act that implies having an occupational safety and health program and an emergency response program in place. All locations have Hurricane Preparedness Plans and Procedures. First aid training and monthly fire drills are conducted. Incident records are maintained and accidents are investigated. Hazardous chemicals at the various facilities were observed to be properly stored with adequate signage and corresponding material safety data sheets (MSDS). The processing plant has ammonia detection system with alarm and sensors distributed throughout the plant, capable of detecting concentrations of 15 ppm of ammonia in the air. The feed mill has an ambulance in the plant to cover emergencies.

General Health and Safety. Workers at the companies visited were observed to be using the appropriate protective equipment. In addition, all employees are provided with health insurance and first aid. Workers handling and applying pesticides are trained and are provided with suitable protective clothing, as per the instructions on pesticide labels, appropriate to the health and safety risks posed.

Labor and Social. The Group maintains harmonious relations with its workers across the organization, by implementing and coordinating several programs, which include training and development, reward and recognition programs, and benefits programs. Employees are free to join a union; however there are no unions presently at the Company. In addition, all workers are provided with lunch and other benefits. The Group complies with Jamaica’s requirements in terms of minimum working age, elimination of forced and compulsory labor, the elimination of discrimination with respect to employment and occupation, freedom of association, the right to organize, and collective bargaining. Jamaica is also a signatory to the ILO conventions on the abolition of child labor.

Monitoring. Jamaica Broilers Group shall 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 health and safety guidelines. The ESAP will include the obligation to submit to the IIC an annual report with information on the implementation of the wastewater treatment improvements for the processing plant and the advances achieved in the Energy Management Program. Also include monitoring data related to compliance with national laws on environmental and workplace safety parameters for each of the companies that is part of the Group.