Project detail - Valency International Pte. Limited

Who is our prospective customer?

Established in 2007 in Singapore, Valency International Pte Ltd is an integrated supply chain manager, commodity trader & processor with predominant operations in Africa and Asia. Historically a trader of Africa-sourced commodities to Asian markets, the company started to expand its downstream value chain in 2015 with cashew processing in Nigeria (the historical sourcing country of the Group) and now operates 18 subsidiaries across Africa, Asia and Europe. While the majority of its revenues come from the cashew, soybean, sesame and agri-input verticals, Valency is a diversified agri-core group with presence in agrochemicals, fertilizers, grains, pulses, cocoa as well as other commodities.

What is our funding objective?

With a USD 20mln FMO participation in a 60mln Proparco-led Friendship Facility transaction, the financing will support Valency's expansion plan in Nigeria, namely (i) establishing new warehouses, (ii) extending the capacity of the group’s cashew processing factory in Ibafo, (iii) setting up a multi-seed crushing plant, and (iv) setting up a food processing and packaging plant.

Why do we want to fund this investment?

The project supports economic growth in Nigeria through export diversification, value addition via local processing of raw materials, development of quality employment and indirect engagement with smallholder farmers in the poorest regions of Nigeria. Out of USD 20mln, FMO provide a USD 10mln first-loss buffer (via the Building Prospects Fund) that catalyzes investments from partners Proparco and DEG in the Nigerian agricultural value chain.

What is the Environmental and Social categorization rationale?

This concerns an E&S A categorized investment for which Proparco is in the lead and responsible for leading on ESG and for conducting the E&S due diligence. The sourcing and processing of commodities (cashew nuts and sesame seeds) in Nigeria has potential adverse E&S risks within the Valency operations and beyond the site boundaries, but can be minimized through relevant mitigation measures. Main E&S risks of this investment include labour and working conditions, climate change, supply chain labour and biodiversity, all exacerbated by the contextual risks of Nigeria. The E&S Action Plan is focused on mitigating these risks by improving policy and procedures as part of E&S and Food and Human Resources Management, improving working and labour conditions of female and casual workers and contractor management, and improving supply chain management practices to address child and forced labour and biodiversity risks. Applicable IFC Performance Standards are PS 1 (Assessment and Management of Risks and Impacts), PS2 (Labour and Working Conditions), PS3 (Resource Efficiency and Pollution Prevention), PS4 (Community Health, Safety and Security), and PS6 (Biodiversity Conservation and Sustainable Management of Living Natural Resources) for the supply chains only. PS5 (Land Acquisition and Involuntary Resettlement) is not applicable as no land acquisition is needed for the Project, PS6 (Biodiversity) is not applicable as the company's facilities do not have an impact on biodiversity, PS7 (Indigenous Peoples) is not applicable as there are no IP impacted by the project. Nigeria does not have any officially recognized indigenous communities by government authorities, the National Human Rights Commission of Nigeria, the African Court of Human and Peoples Rights, and NGO’s such as the International Work Group for Indigenous Affairs. The Constitutions of the Federal Republic of Nigeria recognize only minority groups in terms of population such as the Ogoni People. The Ogoni People are located in River State in the Niger Delta region which is outside the operational areas of Valency. PS 8 (Cultural Heritage) is not applicable as no cultural heritage elements have been identified within in the Valency facilities' footprint. Note that all investments will be managed in accordance with the IFC PSs, and an Environmental & Social Action Plan will be part of the agreement.

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Date	Total FMO financing
9/9/2024	USD 10.00 MLN