Agrícola Ganadera Reysahiwal

The proposed expansion project (the "Project") is fourfold, as it involves the expansion of the production and packing capacity; the enhancement of the suppliers' quality and productivity; the improvement of the distribution capability; and the refinancing of short-term debt.


1) The expansion of the production capacity, which includes civil works and equipment, is aimed at reaching 130.000 liters of milk processing capacity per day from a current level of 70.000. In addition, there will be purchases of other equipment, such as a filter that will increase productivity at the cheese production unit, and packing equipment that will allow the production of a higher volume of yogurt.



2) The enhancement of quality and productivity at the supplier level implies the financing of small ranch cattle breeders (250 families approximately) so that they can count with high quality fertilizers, seeds, and cattle, among other elements necessary to improve their practices and reach levels of quality and productivity that will ultimately benefit Reysahiwal in the elaboration of its value-added products. Assistance will also be provided as well as technical advice.



3) A third part of the project consists of setting up a distribution system that will be comprised of refrigerated trucks, which will be provided to independent distributors under a financing scheme managed by Reysahiwal. This distribution system is necessary for the preservation of highly perishable products such as cheese and yogurts, which have a shorter shelf life than UHT milk.



4) Finally the refinancing component of the Project involves nearly US$3.0 million in short-term debt that need to be replaced for long-term financing.



The total cost of the project has been estimated at US$16.0 million of which the IIC will contribute US$8.0 million through a long-term loan.