Project detail - COMERCIAL INTERNACIONAL EXPORTADORA

COMERCIAL INTERNACIONAL EXPORTADORA

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Who is our client

Comercial Internacional Exportadora S.A. (CISA), established in 1952, is the main operating company of the Mercon Coffee Group (MCG) in Nicaragua. MCG is one of the world’s leading coffee merchants. It has sourcing operations in Central America, Brazil and Vietnam and a significant share in sustainable and quality coffees. Mercon is involved in all aspects of the coffee supply chain from primary production, production and distribution of seedlings, sourcing and processing of coffee from third parties to the delivery and export of green coffee. Mercon has developed into a supply chain manager with upstream operations and producer engagement in origin countries and strong relationships with premium coffee buyers. The coffees that Mercon sources are mostly certified (Utz, 4C, RfA, C.A.F.E. Practices) and deliveries are based on long-term relationships between Mercon and the producers.

Funding objective

FMO will provide a USD 10 million facility. The funds are utilized for the construction of a Robusta coffee mill and improvements in an existing mill in Nicaragua.

Why we fund this project

CISA is the market leader in Nicaragua and sources coffee from approximately 6,000 producers. The company has various programs in place to help some of their producers increase yields, become more climate resilient and increase their revenues. CISA will invest in a new mill processing Robusta coffee that will further incentivize the production of Robusta coffee and improve incomes among small producers in the impoverished Nueva Guinearegion of Nicaragua. The investments in San Carlos will increase the efficiency of the mill.

Environmental and social rationale

FMO’s environmental and social due diligence indicates that the investment will have impact which must be managed in a manner consistent with the following Performance Standards: PS 1 – Assessment and Management of Environmental and Social Risks and Impacts PS 2 – Labor and working conditions PS 3 – Resource Efficiency and Pollution Prevention, PS 4 – Community Health, Safety and Security and PS 6 - Biodiversity Conservation and Sustainable Management of Living Natural Resources. If FMO’s investment proceeds, FMO will periodically review the project’s ongoing compliance with the Performance Standards. The Company is operating in a sustainable manner and is implementing Best Practices in the new coffee growing area in the Atlantic region, which will improve livelihood. The other Performance Standards (PS 5, 7 and 8) are not applicable because there has been neither physical nor economic displacement for the land acquisition of the mill - willing buyer, willing seller arrangement (PS 5), nor any impact on indigenous people (PS 7) or cultural heritages.

More investments

Date Total FMO financing
10/12/2017 USD 10.00 MLN
Website client
http://www.merconcoffeegroup.com/about-us/
Region
Latin America & The Caribbean
Country
Nicaragua
Sector
Agribusiness, Food & Water
Signing date
9/20/2018
Total FMO financing
USD 10.00 MLN
Fund
FMO
Risk categorization on environmental and social impacts, A = high risk, B+ = medium high risk, B = medium risk, C = low risk Environmental & Social Category
(A, B+, B or C)
B+