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Who is our client

HSA Foods consists of six companies (the "Co-Borrowers"), which are members of the HSA Group namely, (i) National Dairy and Food Company Taiz; (ii) National Dairy and Food Company Hodaida; (iii) Yemen Company for Sugar Refining; (iv) Yemen Company for Flour Mills and Silos Aden; (v) Yemen Company for Flour Mills and Silos Al Hodaida; and (vi) Al Hodaida Flour Mills Co. Limited. HSA Group is a family-owned conglomerate established in Yemen in 1938 and today is one of the largest multinational businesses based in the Middle East. The Group manufactures and supplies essential goods and services to multinational organisations, communities, and families, both in Yemen, where it is the country's largest company, and across the Middle East and North Africa region.

Funding objective

FMO will participate for USD 20mln in a USD 60mln debt facility (the "Facility") led by IFC. The funds will be used by the Co-Borrowers to finance their working capital requirements, mainly to purchase of their raw materials, foodstuff commodities, predominantly wheat, raw sugar and powdered milk.

Why we fund this project

According to the United Nations, Yemen is close to a famine and over half of the population is experiencing high levels of food insecurity. The Facility will help the Co-Borrowers to increase the imports of raw materials for the production of essential foodstuffs, i.e., flour, sugar and dairy in volumes that will materially respond to significant undernutrition in Yemeni communities, given HSA Group's status as one of Yemen's largest and most strategically important food importers. Food insecurity in Yemen has been exacerbated significantly in recent years by a wide range of dynamics. Covid-19 pandemic disrupted global supply chains with the prices of commodities and their freight-rates up sharply. In addition, the recent conflict in Ukraine has caused prices of certain key commodities to escalate significantly - notably wheat, with prices reaching their highest levels in 14 years. To enable HSA Group, as the largest importer in Yemen, to mitigate the effects of these unprecedented price increases, HSA Group requested additional financing of USD 60mln in total, from tis finance partners, to cover the material increase in its working capital needs.

Environmental and social rationale

HSA Foods is a category B+ client. FMO's preliminary environmental and social due diligence indicates that the investment may have impacts 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: Labour and working conditions; - PS 3: Resource Efficiency and Pollution Prevention - PS 4: Community Health, Safety and Security; and - PS 6 Biodiversity Conservation. - PS 5 Land Acquisition and Involuntary Resettlement is not applicable since there is no land acquisition or economic displacement associated to the financed activities; - PS 7 Indigenous people is not applicable since no indigenous people are directly or indirectly affected by the financed activities and PS 8 Cultural Heritage is not applicable since the financed activities do not affect any tangible or intangible cultural heritage. FMO will periodically review the project's compliance with the Performance Standards.

More investments

Date Total FMO financing
5/12/2021 USD 20.00 MLN
Agribusiness, Food & Water
Signing date
Total FMO financing
USD 20.00 MLN
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)