Project detail - Ulusoy Un Sanayi ve Ticaret AS

Who is our prospective customer?

Ulusoy Un Sanayi ve Ticaret A.Ş. (“Ulusoy Un”) is one of the largest wheat-flour milling companies in Türkiye, milling, and selling flour domestically and for export to the Middle East, Africa, and Asia. The company purchases wheat in Türkiye and from abroad in the Black Sea region and then processes it into flour in its milling facilities in the cities of Samsun, Çorlu/Tekirdağ, Antakya, as well as in its subsidiary, Söke Degirmencilik Sanayi ve Ticaret A.Ş.’s (“Söke”) mills in Söke/Aydın and Ankara. The company is also engaged in the trading of wheat and other grains in domestic and international markets, and agri-commodity storage/warehousing in various locations in Türkiye. Ulusoy Un has been a client of FMO since 2018, when FMO provided a long-term capex facility of USD 18 mln to the Company for financing the construction of its new state-of-the-art flour mill in Samsun. Later in 2021, FMO provided an additional long-term acquisition loan of USD 25 mln to the Company for financing the acquisition of Söke, a local flour producer with a recognisable consumer brand and the working capital requirements of the acquired company. In 2023, FMO provided a long-term capex facility of USD 12 million to Ulusoy Un to modernize its recently acquired mill and expand its milling capacity in the Antakya Province of Türkiye. This funding supported the creation of new jobs in a region severely affected by the earthquake.

What is our funding objective?

As part of its growth strategy, Ulusoy Un has outlined a capex program, which includes the construction and operations of i) a pasta factory in 2025/2026 and ii) new vertical and horizontal storage facilities for flour milling in 2025. Both investments will be located near the Company’s main flour milling factory in Samsun which is an important port city on Black Sea and will strengthen Ulusoy Un’s position in international markets by further integrating the value chain through the introduction of a new value-added product – pasta and unlocking the growth potential of the mill in Samsun for increasing flour exports to international markets. New funding from FMO will support Ulusoy Un especially in entering the pasta business in Türkiye, enabling the production of soft and durum wheat-based pasta for both international and domestic markets. FMO plans to provide a long-term facility of USD 75 million to finance the capex and working capital needs of this new pasta facility as well as new vertical and horizontal storage facilities, which are expected to increase employment in the region.

Why do we want to fund this investment?

FMO supports an important agribusiness player that has linkages in the up-stream agricultural sector in Türkiye. The transaction could contribute to SDG 2 - zero hunger (contribution to global food security via supporting of soft wheat based pasta products, which are expected to be exported as high-protein staple products at affordable price to LMICs, primarily targeting Sub-Saharan Africa.), SDG 8 - decent work & economic growth (contribution to the increase in economic activity and employment in a rural region of Türkiye, providing additional job opportunities, including 20% for women employees) and SDG 13 – green label by building a new state-of-the-art pasta factory (with significant energy and resource efficiency employing the Best Available Technology) as well as a storage facility to optimize logistics operations of the supply chain in Samsun (aiming to reduce transportation costs and fuel consumption for logistics).

What is the Environmental and Social categorization rationale?

The preliminary E&S risk categorization is “B” (medium to low). E&S operational risks and impacts are mostly site-specific that must be managed consistently with the following IFC Performance Standards: IFC PS1: Assessment and Management of Environmental and Social Risks and Impacts, PS2: Labor and working conditions, PS3: Resource Efficiency and Pollution Prevention, and PS4: Community Health, Safety and Security. PS5 (Land Acquisition and Involuntary Resettlement), PS6 (Biodiversity Conservation and Sustainable Management of Living Natural Resources), PS7 (Indigenous Peoples), and PS8 (Cultural Heritage) are considered not applicable. The project is in a dedicated industrial area with necessary provisions for environmental impact elimination. The company has ISO certifications that serve as the backbone of its environmental and social management system. The company sources from highly mechanized producers of wheat, soy, and corn from Eastern Europe and Türkiye.

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