Uumbal Veracruz Pine (IFC-42727)

Countries
  • Mexico
Geographic location where the impacts of the investment may be experienced.
Financial Institutions
  • International Finance Corporation (IFC)
International, regional and national development finance institutions. Many of these banks have a public interest mission, such as poverty reduction.
Project Status
Proposed
Stage of the project cycle. Stages vary by development bank and can include: pending, approval, implementation, and closed or completed.
Bank Risk Rating
B
Environmental and social categorization assessed by the development bank as a measure of the planned project’s environmental and social impacts. A higher risk rating may require more due diligence to limit or avoid harm to people and the environment. For example, "A" or "B" are risk categories where "A" represents the highest amount of risk. Results will include projects that specifically recorded a rating, all other projects are marked ‘U’ for "Undisclosed."
Voting Date
Mar 31, 2021
Date when project documentation and funding is reviewed by the Board for consideration and approval. Some development banks will state a "board date" or "decision date." When funding approval is obtained, the legal documents are accepted and signed, the implementation phase begins.
Borrower
AGROFORESTAL UUMBAL VERACRUZ, S.A.P.I DE C.V.
A public entity (government or state-owned) provided with funds or financial support to manage and/or implement a project.
Sectors
  • Agriculture and Forestry
The service or industry focus of the investment. A project can have several sectors.
Investment Type(s)
Loan
The categories of the bank investment: loan, grant, guarantee, technical assistance, advisory services, equity and fund.
Investment Amount (USD)
$ 13.00 million
Value listed on project documents at time of disclosure. If necessary, this amount is converted to USD ($) on the date of disclosure. Please review updated project documents for more information.
Primary Source

Original disclosure @ IFC website

Updated in EWS Feb 18, 2021

Disclosed by Bank Feb 16, 2021

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Project Description
If provided by the financial institution, the Early Warning System Team writes a short summary describing the purported development objective of the project and project components. Review the complete project documentation for a detailed description.
Project Description (summary)
 
Agroforestal Uumbal Veracruz (“Veracruz” or the “Company”) is a pine forestry company established in 2011 as a JV between Industrias AlEn (“AlEn”), a leading Mexican household cleaning products company, and Ecom Agroindustrial (“ECOM”), a global agribusiness company. The Company was created to produce pine resin for the manufacturing of household cleaning products. From planting, trees take about 7 years to reach a meaningful resin production. The project will support the sustainable forestry operations to bring the plantation to its productive plateau.
 
 
Project Description

The proposed investment is a US$13 million loan to Agroforestal Uumbal Veracruz (“Uumbal Veracruz”). The company was established in 2011 as a joint venture between Industrias AlEn, a leading Mexican household cleaning products company, and Ecom Agroindustrial Corp. Ltd (ECOM), a global commodity trading and processing company.  Uumbal Veracruz was created to produce pine resin for the manufacturing of household cleaning products. The company is located in the southeast of the state of Veracruz, where it owns 7,000 hectares and operates 3,700 hectares of pine plantations (Pinus caribaea x elliotti), the remaining area is dedicated to the preservation of forests and wetlands (2,000 ha), designated as potential for plantations (1,000 ha), or occupied by infrastructure (300 ha). The farms are located in the municipalities of Moloacán and Las Choapas (District 1 – seven farms with a total area of 5,500 ha) and Sayula de Alemán (District 2 – three farms with a total area of 1,500 ha). No additional expansion requiring land acquisition is envisaged. The distance between District 1 and 2 is about 70 km. The farms were acquired between 2011 and 2017 and no further expansion is planned. Between 2016 and 2018, Uumbal Veracruz planted an additional 915 hectares through a smallholders' program with 25 third-party producers in neighboring Tabasco.

 

Overview of IFC's Scope of Review

Given current travel restrictions related to the COVID-19 pandemic, review of this investment consisted of a virtual appraisal comprising technical, environmental and social information made available by Uumbal and a series of meetings via video conference with company representatives, including corporate environmental, health and safety (EHS), social, human resources and senior management representatives from Uumbal and its parent companies, from September 8th to October 1th, 2020.  IFC also retained the services of a local social consultant to visit the site operations on the week of October 16th to interview local stakeholders, including community members, neighboring landowners, workers, union delegate, and associated producers (third-party suppliers) to assess working conditions and the company’s relations with stakeholders. IFC’s appraisal also used the Integrated Biodiversity Assessment Tool (IBAT) to screen for negative impacts on critical habitats, and IFC’s Gender-Based Violence (GBV) risk screening tool to screen for GBV risks in Uumbal’s direct and sourcing operations.

The appraisal will be supplemented with a field review, after travel restrictions arising from the COVID-19 pandemic are removed. The review will include a site visit to Uumbal’s headquarters in Tabasco and to its operations in Veracruz focusing on the implementation of its EHS, HR and Supply Chain management systems and plans at the plantation level. The supplemental field review will include a review of the implementation of stakeholder engagement practices and relations with the local communities, meetings with relevant stakeholders, and a review of EHS, labor, and working conditions at its farms’ operations and at the outgrower scheme.      

Investment Description
Here you can find a list of individual development financial institutions that finance the project.
Private Actor 1 Private Actor 1 Role Private Actor 1 Sector Relation Private Actor 2 Private Actor 2 Role Private Actor 2 Sector
- - - - AGROFORESTAL UUMBAL VERACRUZ, S.A.P.I DE C.V. Contractor Agriculture and Forestry

Contact Information
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