Project detail - MCS Coca Cola LLC

MCS Coca Cola LLC

Status: Completed investment
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Disclaimer

The information as disclosed is indicative and provided on an "as-is/as available" basis for general informational purposes only and should not be construed as financial, legal or investment advice, nor as a commitment or an offer to arrange or provide any financing. The final decision to provide financing is subject to the terms and conditions of FMO in its sole and absolute discretion. When providing links to other sites, FMO bears no responsibility for the accuracy, legality or content of the external site or for that of subsequent links. The information on proposed investment for high-risk investments is made available in the language relevant to the country or region where the bulk of operations take place. Translations of any information into languages other than English are intended as a convenience for local stakeholders. In case of any discrepancy, the information provided in English will prevail.

Who is our customer

MCS Coca Cola (“MCSCC”) started its operations in 2001 and has become the largest producer, bottler and distributor of branded soft drinks and water in Mongolia. MCSCC is part of MCS Group being one of the biggest business holdings in the private sector in Mongolia that conducts diversified activities across beverages, telecommunications, energy and real estate sectors.

What is our funding objective?

FMO intends to participate for up-to USD 25 million in USD 110 mln senior and long term EBRD-led syndicated loan facility. The funds will be used to finance MCSCC’s investment programme of the construction of a new mineral water production and bottling plant in Selenge province of Mongolia and partially refinancing the existing loans.

Why do we fund this investment?

FMO wishes to support a major beverage player in Mongolia by proving a long-term capex loan which is essential for companies such as MCSCC. The Project will support i) launching of new product sub-categories in terms of natural mineral water , ii) initiation of exports (and diversification from currently only domestic sales) by selling natural mineral water in high growth and unsaturated markets in neighboring China and other East Asian countries and iii) creating 100 new jobs in rural areas of Mongolia.

What is the Environmental and Social categorization rationale?

The environmental and social risks associated with the construction and operation of a mineral water bottling plant, and the operation of a logistics distribution network, are site specific and can be managed via the implementation of standard industry practices. Due diligence is on-going in order to assess, and develop any related mitigants, with regard to the sourcing of natural mineral water and the sustainability of utilizing and maintaining such a resource, as well as the effectiveness of construction and contractor management procedures. IFC PS 1-5 are triggered. PS 6 (Biodiversity Conservation and Sustainable Management of Living Natural Resources), PS 7 (Indigenous Peoples) and PS 8 (Cultural Heritage) are not applicable because no impact is expected on biodiversity, no indigenous people are present in the area of influence of MCSCC and no cultural heritage sites have been detected during the assessment. Preliminary E&S categorization is B/B+.

Region
Asia
Country
Mongolia
Sector
Agribusiness, Food & Water
Publication date
8/23/2018
Effective date
2/5/2019
End date
9/25/2023
Total FMO financing
USD 18.40 MLN
Funding
FMO NV
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+