Project detail - Zalar Agri SARL

Who is our customer?

Zalar Agri SARL is a well-established (founded in the 1970’s) apple producer in Morocco (Global GAP certified) with 7,373 tons produced in 2017. The Company undertook significant investments in the last few years which are expected to generate commercial yields in the upcoming years, help diversify the Company’s produce types and expand its regional farming operations within Morocco. This strategy enables a diverse and complementary range of products with nearly year-round harvesting and/or continuous presence in the market. The existing and new orchards are located throughout Morocco and include apples, pears, almonds and pomegranates in the North (Fès and Sefrou region), dates in the East (Errachidia region), stone fruits in the North (Khemisset region), avocados in the Center (El Jadida region) and citrus in the South (Taroudant region) and the North (Kénitra region). An apple packing and storage unit is also located in the Fès region along with the apple orchards. Zalar Agri is owned by the Chaouni family, and its main shareholders are Mr. Farouk Chaouni Benabdallah, Mr. Fouad Chaouni Benabdallah and Mr. Ali Berbich.

What is our funding objective?

FMO intends to participate for up to USD 12 million in a USD 24 million long-term facility led by IFC. The funds will be used to support the expansion of Zalar Agri SARL (orchards and supporting infrastructure).

Why do we fund this investment?

FMO wishes to support a major agri player in Morocco, who has invested in growing healthy fruits for healthy generations. This IFC-led financing will further support the company’s successful management of its operations, and support sustainable development, via primary production of fresh fruit in Morocco, supporting 40% women employment in these orchards, generating hard currency income for the country via its exports, and its commitment to the sustainable agriculture principles and distribution / logistics of the products to end consumers in high-sanitary and -quality standards.

What is the Environmental and Social categorization rationale?

Zalar Agri SARL is a family agriculture company, with orchard farms in Morocco, which produces, processes and distributes a variety of high-value fruits (apples, pears, avocados, stone fruits, pomegranates, citrus, dates, almonds and potentially olives in the future). E&S risks are categorized as Category B+ mainly due to organizational health and safety, labour and working conditions for seasonal workers, and environmental resources management. These potential risks can be mitigated when managed according to the following IFC 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. There is no new land acquisition nor involuntary resettlement (PS5) as part of this project. The project sites are not in the sphere of influence of Indigenous People (PS 7) nor Cultural heritage (PS8); based on this performance standards 5, 7, and 8 are not applicable. If FMO’s investment proceeds, FMO will periodically review the project’s compliance with the Performance Standards and adequate mitigation measures will be agreed.