Project detail - Agropecuaria Maggi

Who is our prospective customer?

Our borrower is Agropecuaria Maggi (hereafter “Agro Maggi”), a wholly owned subsidiary of Andre Maggi Participacoes (hereafter the “Amaggi Group”), one of the largest Brazilian-owned agribusiness companies active in the grains, oilseeds, and fiber industries. The Amaggi Group operates under four distinct business divisions, with Agro Maggi representing the farming division. The company’s core business encompasses the production of soybeans, corn, and cotton on owned and leased farmlands. The other business divisions of the Amaggi Group include commodity trading, logistics & operations and energy generation.

What is our funding objective?

The funds will be allocated to cover costs associated with investments made by Agro Maggi to transition from corn to cotton crops as a second crop in soy farms in Mato Grosso State. FMO is set to participate as a B-Lender in an existing transaction structured by the International Finance Corporation (IFC) and disbursed in 2021. This means that FMO will follow IFC in its Environment, Social & Governance (ESG) work and assessment of Agro Maggi. FMO anticipates contributing USD 40 million in debt, elevating the total facility amount from USD 209.50 million to USD 249.50 million.

Why do we want to fund this investment?

With this investment, FMO partners with a pioneering business that elevates standards beyond local law and catalyzes positive impacts . FMO recognizes the Agro Maggi as a critical agent that is advancing standards and leading the sustainability agenda in Brazil. 100% of Agro Maggi’s cotton production is already Better Cotton Initiative (BCI) certified and these new cotton fields will be so as well, thereby the transaction has the FMO Green Label.

What is the Environmental and Social categorization rationale?

The E&S category for this project is classified as B+, as defined by FMO's Sustainability Policy, aligning with IFC's categorization as B. Given that this is a B-participation for FMO, FMO follows the lead of IFC in its E&S due diligence on Agro Maggi. The following is copied from IFC’s disclosure website (https://disclosures.ifc.org/project-detail/SII/43740/amaggi-sustainable-cotton), which can also be consulted for additional information: This is a Category B project according to IFC’s Policy on Environmental and Social Sustainability as the potential adverse E&S risks and/or impacts which are generally site-specific, are largely reversible and can readily be addressed thorough mitigation measures as discussed below. Key E&S risks and issues for this project include (i) effective implementation of EHS management systems, (ii) potential workers agrochemical exposure and workers’ occupational health and safety (OHS) risks from farming and processing activities, (iii) fair and safe working conditions for employees and contractors, and (iv) stakeholder engagement and nearby community health and safety impacts. Other E&S potential impacts include risk of cotton dust explosion and emergency response preparedness; agrochemical management; management of security forces, etc.