Project detail - South Asia Foods LLC-FZ

Who is our customer

South Asia Foods LLC (SAF or the company) is a SPV set up to manage the sales for Taprobane Seafoods Ltd. (TSF or Taprobane) Taprobane is a leading seafood export company in Sri Lanka processing Blue Swimming Crab into pasteurized crab meat and Vannamei shrimp, which it began farming two years ago – the first Sri Lankan company to do so – in response to a global shift in preference to Vannamei from black tiger shrimp. Established in 2010, TSF has one main process facility and fourteen mini-processing facilities, employing over 2,000 fulltime employees, predominantly underprivileged women including war widows, throughout the northern and northwestern provinces of Sri Lanka. The shrimps processed by TSF are supplied by its own farms and third-party growers. The crabs are wild-caught and supplied by local fishermen. TSF exports seafood products globally under their own brand or for third parties.

What is our funding objective?

The funds will be used for capex investments that will further strengthen TSF’s value chain in Sri Lanka. The investments include rehabilitating abandoned shrimp farms owned by TSF and by third-party growers, investing in new farms, circular tanks and hatcheries, in a new processing facility and for other general capex investments. The DFCD funds will be used to finance part of the core portion of the working capital needs. The Facility will be repaid from export proceeds, which account for ca. 95% of the total turnover.

Why do we fund this investment?

With this project, TSF promotes sustainable aquaculture by rehabilitating abandoned shrimp farms and converting them into new ponds and circular tank farms. Because TSF (/Sri Lanka) is a relatively new player in a matured industry, it has the advantage to leapfrog with the latest technology and best aquaculture practices in the sector, supported by international partners in the industry. For us, the integrated ‘farm to fork’ business model is the main reason to partner with TSF. The proposed transaction fits the AFW strategy because (i) it focusses on the whole supply chain from early production at hatcheries to frozen and packed end-products for consumers thereby applying modern production, processing and logistics techniques, (ii) it actively empowers and engages with women in management positions in its operations, (iii) it helps reducing inequality through its partnership with smallholder farmers (land holdings < 1ha) (iv) TSF is known to encourage actively women to start working and making a living wage, and to participate women as farmers or otherwise throughout its supply chain (v) TSF’s farming operations are strictly based Best Aquaculture Practice (BAP) standards, and other important industry standards and certifications and open to work towards Aquaculture Stewardship Counsel (ASC) certification. This transaction has been approved as a 2x Challenge.

What is the Environmental and Social categorization rationale?

E&S risks are categorized as Category B+ mainly due to risks relating to biodiversity conservation and management of living natural resources (especially animal welfare and biosecurity). FMO’s environmental and social due diligence indicates that the investment will have impacts which must be managed in a manner consistent with 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 PS 5 on Land Resettlement, PS 7 on Indigenous People and PS 8 on Cultural Heritage are not expected to be triggered. PS 6 – Biodiversity Conservation and Sustainable Management of Living Natural Resources

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Date	Total FMO financing
3/22/2023	USD 5.00 MLN