Project detail - Phuc Sinh Corporation

Who is our prospective customer?

Founded in 2001, Phuc Sinh Corporation (“Phuc Sinh”) is the one of the leading, privately owned, exporters of agricultural products in Vietnam. The primary business of Phuc Sinh is in processing and exporting of coffee and pepper (spices) globally. Export destinations include many countries across Asia, EU, US, and Australia. Coffee beans are processed (wet/dry) before exporting. More value adding takes place with spices through various product categories and private labelling. Historically a B2B company, Phuc Sinh’s vision is to transform into an integrated coffee and pepper platform, offering value-added products to both B2B and B2C customers, capturing higher margins down the value chain.

What is our funding objective?

Proposed is a USD 15mln senior secured financing package consisting of two facilities i) a USD 12mln DFCD-Land Use Facility funded 7-yr secured term loan for the construction of a new coffee processing factory in Dak Nong, and ii) a USD 3mln Building Prospects funded 3-yr secured term loan for working capital. FMO’s financing will support Phuc Sinh to further increase its coffee processing and exporting capacity close to the primary coffee producing region in Vietnam and improve sustainability and traceability practices in the value chain.

Why do we want to fund this investment?

Phuc Sinh fits well into the strategic plan of FMO, and the Agribusiness, Food & Water strategy, specifically through local value creation, local employment creation, supporting climate mitigation (reducing deforestation in the supply chain and increasing certification) and supporting economic growth. Vietnam is an important global player in the coffee sector as the second largest producer and this sector is a major source of income for the country. The construction of the new coffee processing plant in Dak Nong and the sourcing of raw coffee from farmers in the central highlands of Vietnam will create further economic value locally. In addition, FMO will support Phuc Sinh in the development of a strong corporate governance framework and structure.

What is the Environmental and Social categorization rationale?

The project's E&S risk category is B+. The risk categorization is guided by contextual risks in agribusiness and potential E&S risks in the company’s own operations, and as part of the new processing plant construction and its supply chain. The following IFC Performance Standards are applicable: PS 1 (organization, risk assessment, stakeholder engagement and grievance redress, contractor and supply chain management), PS 2 (working conditions and health & safety), PS 3 (Resource Efficiency, Pollution Prevention), PS 4 (Community Health Safety and Security), and PS 6 (Biodiversity conservation and sustainable management of living natural resources including supply chain and climate impact). There will be no land acquisition done in relation to the investment. In the operational areas of Phuc Sinh there are ethnic minorities that fit in the definition of Indigenous Peoples, but no cultural heritage sites were identified and no impacts are expected due to Phuc Sinh operations. Based on this PS 5 (Land Acquisition and Involuntary Resettlement), PS 7 (Indigenous Peoples), and PS 8 (Cultural heritage) are regarded as not relevant.

More investments

Date	Total FMO financing
9/25/2024	USD 12.00 MLN