Comohogar II

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Project Number: 
Expected Consideration Date by the Board: 
Date Posted: 
Comohogar S.A.
Financing Requested: 
Up to US$10 million
Distribution and Retail
Quito, Guayaquil, and other cities in Ecuador
Scope Objective: 

The project consists of a corporate loan that will be used to finance new points of sale in Ecuador’s major cities and permanent working capital needs, chiefly receivables and inventory. This loan of up to US$10 million will support the growth and development plans of the Sukasa, Todohogar, and SuKocina stores, a new type of retailer recently developed by Comohogar. It is estimated that once the project is completed, Comohogar will have 28 points of sale strategically located throughout Ecuador.

Comohogar offers good-quality products, competitive prices, and reasonable financing for its customers from all socioeconomic strata in the Republic of Ecuador. Comohogar has over 15 years of experience and is well positioned in the semi-durable goods market for Ecuadorian homes. Comohogar is a business anchor in the household goods supply chain–which includes appliances, linens, household items, kitchenware, audio and video equipment, and a Christmas-product line. Comohogar offers goods manufactured by small and medium-sized Ecuadorian enterprises, in addition to imported products. It works with domestic suppliers to deliver goods through the “Ecuador shops Ecuador” programs and fairs, promoted by the Ecuadorian government to encourage domestic production.

This loan is Comohogar’s second from the IIC. It obtained its first loan from the Corporation in 2008 to support the company’s expansion and growth. Specifically, Comohogar achieved annual sales of US$83 million from 21 stores in 2011, compared to US$50 million from 10 stores in 2007. Comohogar has complied with the terms and conditions of the first IIC loan, including the environmental protection programs and the handling of social and environment aspects agreed to with the IIC.

Environmental Review: 

Environmental and Labor Issues

This is a category III project according to the IIC’s environmental and labor review procedure because it could produce certain effects that may be avoided or mitigated by following generally recognized performance standards, guidelines, or design criteria. The principal environmental and labor issues related to this project include community health and safety, fire safety, emergency response, and solid waste management and disposal.

Environmental compliance: Comohogar has been implementing the Environmental and Social Action Plan (ESAP) agreed to as part of an operation previously approved by the IIC. The ESAP includes additional mitigation measures related to the enterprise’s emergency response preparedness and fire safety plans. Comohogar is drawing up emergency response preparedness plans with the advice of industrial safety experts in order to meet fire departments’ and municipal authorities’ requirements for its facilities, which include stores, offices, and warehouses. Once the company completes the implementation of its ESAP with the additional mitigation measures (related to emergency response preparedness and fire safety plans), particularly in its new and existing stores, Comohogar will be in compliance with the IIC’s environmental and fire safety requirements.

Solid Waste Management/Liquid Effluent Treatment: Comohogar’s domestic solid waste is collected by the municipal government. The company also has a program for recycling waste cardboard, which is collected and sold to local recyclers.

Community Health and Health Security: The IIC shall require the preparation of emergency plans that contain fire protection and other measures to protect lives in all Comohogar stores. The plans must include fire prevention measures; means of egress (clear, unimpeded escape routes, marking and signage, emergency lighting, etc.); detection and alarm systems; compartmentation (including taking all steps to prevent or slow the spread of fire and smoke); fire suppression and control (automatic and manual fire protection systems, such as portable manual extinguishers, fire hose reels, etc.); emergency response plans (procedures to assist staff and emergency response teams during actual emergencies and drills); and operation and maintenance (preparing regular maintenance and testing schedules for fire safety and prevention equipment such as alarms, extinguishers, etc). According to Comohogar’s most recent report of May 2012, the company is currently working to update the emergency plans, renew the operating permits of its existing stores, and obtain permits for the new stores that it plans to open. The company believes that both the new emergency plans for 2012-2014 approved by the fire departments and the operating permits will be obtained during the second half of 2012. The IIC shall require Comohogar to complete these arrangements as part of its ESAP. Emergency response training shall also be conducted by the company at both the warehouse and the stores.

Labor Considerations: The IIC shall require that Comohogar’s human resource policy and occupational health and safety practices comply with local laws and IIC labor requirements. Comohogar has internal occupational safety and health regulations that were approved by the Ministry of Labor and Employment.

Monitoring and Compliance: The company’s monitoring procedures shall be described in the ESAP that Comohogar will continue to implement. The company shall submit an annual report summarizing the monitoring data related to emergency response preparedness, fire safety, occupational health and safety, accident reports, solid waste disposal, and labor issues. During the life of the project, the IIC shall monitor ongoing compliance with its own environmental and labor review guidelines by evaluating the monitoring reports submitted annually to the IIC by the company and by conducting periodic site reviews as part of project supervision.