Cambodia: De Heus Sustainable and Inclusive Feed Supply Chain Project
Senior unsecured amortizing US dollar (USD) loan to De Heus TMH Company Limited (DH-TMH) of up to $15 million to support (i) the expansion of storage and processing capacity for animal feed and (ii) permanent working capital needs (raw material inventory from and advances for local corn, rice, and cassava farmers and receivables on poultry, fish, and other livestock farmers) and a partial guarantee of up to $5,250,000 covering principal from the Asian Development Fund (ADF) Private Sector Window (PSW), to De Heus TMH Company Limited (DH-TMH) for the De Heus Sustainable and Inclusive Feed Supply Chain Project in Cambodia.
Private Sector Operations Department
Request for information
21 April 2022
- Agriculture, natural resources and rural development
|Project Name||De Heus Sustainable and Inclusive Feed Supply Chain Project|
|Borrower / Company||De Heus Animal Nutrition B.V.
De Heus TMH Company Limited
|Country / Economy||Cambodia
|Type or Modality of Assistance||
|Strategic Agendas||Environmentally sustainable growth
Inclusive economic growth
|Drivers of Change||Private sector development
|Sector / Subsector||
Agriculture, natural resources and rural development / Agro-industry, marketing, and trade
|Gender Equity and Mainstreaming||Effective gender mainstreaming|
|Responsible ADB Department||Private Sector Operations Department|
|Responsible ADB Division||Office of the Director General, PSOD|
|Responsible ADB Officer||Jeong, Juhyun|
|Description||Senior unsecured amortizing US dollar (USD) loan to De Heus TMH Company Limited (DH-TMH) of up to $15 million to support (i) the expansion of storage and processing capacity for animal feed and (ii) permanent working capital needs (raw material inventory from and advances for local corn, rice, and cassava farmers and receivables on poultry, fish, and other livestock farmers) and a partial guarantee of up to $5,250,000 covering principal from the Asian Development Fund (ADF) Private Sector Window (PSW), to De Heus TMH Company Limited (DH-TMH) for the De Heus Sustainable and Inclusive Feed Supply Chain Project in Cambodia.|
|Objectives and Scope||
The project will support DH-TMH to expand the storage and processing capacity of its animal feed factory in Kampong Speu province, which supplies feed to poultry, pig, and fish farmers in Cambodia. It will support high-quality, affordable, and sustainable animal feed production and improve the climate resilience of the company's operations. The project will contribute to the development of Cambodia's nascent feed sector, which is highly dependent on imports. The project is fully aligned with the Government of Cambodia's goals to develop its domestic animal feed sector and ensure sufficient domestic production of meat from livestock and aquaculture. The project will benefit the livelihoods of smallholder poultry farmers and maize farmers in DH-TMH's supply chain, and the 116 employees of DH-TMH. The associated TA will provide capacity building support to 2,000 maize farmers and 2,000 poultry farmers to support a prompt and climate-resilient recovery from the COVID-19 pandemic.
The ADB PSW unfunded risk transfer will support bankability by enabling significant de-risking of the project.
|Linkage to Country/Regional Strategy||
The project is consistent with ADB's Strategy 2030's operational priority (OP) 1 (addressing remaining poverty and reducing inequalities) by improving the livelihoods of smallholder poultry and maize farmers; OP2 (accelerating progress in gender equality) through gender interventions targeted at women workers and farmers; OP3 (tackling climate change, building climate and disaster resilience, and enhancing environmental sustainability) by promoting the climate resilience of DH-TMH's operations and of maize and poultry farmers; and OP5 (promoting rural development and food security), through the integration of farmers, agribusinesses, and consumers into efficient and sustainable value chains. The project is consistent with ADB's country partnership strategy, 2019 to 2023 for Cambodia, which calls for improvement of the productivity and commercialization of agriculture through the strengthening of value chains.
The project is aligned with the Operational Plan for Private Sector Operations, 2019 to 2024, which calls for working with tier 1 agribusiness companies, expanding the agricultural inputs subsector, and working in low income countries. The project will complement ADB's sovereign assistance program in Cambodia, which aims to strengthen agricultural value chain linkages and safety, and promote private sector-driven agricultural value chain development.
|Summary of Environmental and Social Aspects|
|Environmental Aspects||ADB has categorized the investment in compliance with ADBs Safeguard Policy Statement (2009) as category B for environment. The planned expansion to accommodate additional machinery and storage will take place within the footprint of the existing facility and is anticipated to have limited and temporary environmental impacts.|
|Involuntary Resettlement||ADB has categorized the investment in compliance with ADBs Safeguard Policy Statement (2009) as category C for involuntary resettlement. The proposed activities will not require additional land for the expansion of storage and processing capacity of the feed mill and will not result in physical or economic displacement. The audit confirmed that there are no legacy issues associated with the leased land where the facility is located.|
|Indigenous Peoples||ADB has categorized the investment in compliance with ADBs Safeguard Policy Statement (2009) as category C for indigenous peoples. There are no expected adverse impacts to distinct and vulnerable indigenous peoples. The nearest indigenous peoples community is located about three kilometers from the facility.|
|Stakeholder Communication, Participation, and Consultation|
|Timetable for assistance design, processing and implementation|
|Credit Committee Meeting||-|
|Approval||21 Apr 2022|
|Last PDS Update||22 Aug 2022|
Project Data Sheets (PDS) contain summary information on the project or program. Because the PDS is a work in progress, some information may not be included in its initial version but will be added as it becomes available. Information about proposed projects is tentative and indicative.
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|Title||Document Type||Document Date|
|De Heus Sustainable and Inclusive Feed Supply Chain Project: Report and Recommendation of the President||Reports and Recommendations of the President||Mar 2022|
|De Heus Sustainable and Inclusive Feed Supply Chain Project: Initial Poverty and Social Analysis||Initial Poverty and Social Analysis||Feb 2022|
Safeguard Documents See also: Safeguards
Safeguard documents provided at the time of project/facility approval may also be found in the list of linked documents provided with the Report and Recommendation of the President.
None currently available.
Evaluation Documents See also: Independent Evaluation
None currently available.
None currently available.
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