Quinine production and processing project Quinine is processed and marketed into various derivatives and alkaloids. The processing is fairly sophisticated and there is only a limited number of production units in the world.The production outside Europe is mainly concentrated in Indonesia and India. Indonesia has two extraction facilities, Kimia Farma and PT SiL. Arnold Suhr Netherlands has an exclusive co-operation with Kimia Farma.However, the production facility of Kimia is situated in the heart of the city of Bandung and the Indonesian government has decided that the location in Bandung should be closed. Therefore, the applicant Arnold Suhr Netherlands and the local partner Bionexx are interested in the establishment of an extraction unit in combination with investments in new plantations in Madagascar in order to better control the quality of the bark (which is presently mainly produced in DR Congo) and to create a sustainable growth of the supply of bark.Main activity of the project will be the processing of cinchona bark into quinine derivates for the international market. Initially, a limited part of the bark will be obtained from local production in Madagascar, a major part will still be imported. Local production will be actively promoted under the project through training and technical advice in the establishment of cinchona plantation and the establishment of nurseries for improved cinchona seedlings in the area of Fianarantsoa where the Artemisia processing plant of the local partner is located. The quinine processing plant will have a capacity of 1,400 Mtons of cinchona bark a year to produce 73 Mtons of totaquina (the quinine precursor). The capacity of the nursery to be established will allow the production of 150,000 seedlings annually for the plantation of 75 ha.Corporate Social Responsibility (CSR)The local partner Bionexx has a well-established strategy on Corporate Social Responsibility strategy and the project will further adopt this strategy to the new to establish quinine processing operations in Madagascar, adhering to all international and national standards of human rights and labour norms and subscribing to fair employment and industrial relations. The labour force employed by Bionexx in its processing facilities in Fianarantsoa, as well as the agricultural staff employed in the various field activities constitute one of the better paid human resources with a well-established training programme on technical issues but also on social, security and health issues such as HIV/AIDS prevention.Impact•	Employment and working conditionsWages paid by Bionexx are well above local minimum wages, labour laws and regulations. They provide additional provisions for healthcare, pension and unemployment security. The extensive training programme foreseen under the project puts staff and labour in a favourable position in terms of capacities and skills as well as language training.All staff employed by the joint venture in the processing facility, as well as in the plantations, will receive official labour contracts and good and safe working conditions, in line with training provisions. Bionexx carries out a women friendly career policy and employs both women and men on an equal footing. The policy will be further expanded under the CSR policy of the joint venture.•	Innovation / Transfer of knowledgeThe new production facility for the processing and extraction of cinchona bark is completely new in Madagascar. Together with the promotion of cinchona plantations it will provide unique opportunities for Madagascar.•	Chain effectsAbout 1,500 tons of cinchona bark is needed in order to produce 55 Mtons of quinine derivates. To replace all imports by locally produced bark 1,000 to 1,500 ha of cinchona plantations need to be established with 1 ha producing about 1 to 1.5 tons bark. A start will be made under the project with the rehabilitation of 180 ha in the Beorana plantation and a first 70 ha under own management of the joint venture on a suitable location in the Fianarantsoa area.In view of the good market opportunities for cinchona bark with the new to establish processing facility by the project, it is expected that several small and larger plantation owners will be interested to invest in cinchona plantations. The project will actively promote such initiatives and provide technical advice and good plant materials to smallholder farmers as well as plantation owners in areas suitable for cinchona production in order to satisfy the processing capacity of the quinine facility established by the project. It is expected that 10 to 20 outgrowers will be contracted delivering an amount of 150 Mtons of bark with an estimated value of € 300,000.The raw material is exported to Europe where it is further processed. The end product, anti-malaria medication, is then exported to mostly developing countries (there are large anti malaria programmes e.g. by WHO and UNDP), amongst others Madagascar.•	Impact on the sectorImpact on other commercial partiesThere will be some, but limited effect on other producers and service providers. Most likely transport companies and packaging companies will benefit most from the project.Impact on other non-commercial partiesThe impact on non-commercial parties is limited. The joint venture will cooperate with the University and its commercial partner.•	EnvironmentThe processing facility as well as the establishment of new plantations may have a negative impact on the environment. The processing facility will use chemicals for the extraction of the quinine alkaloids. An environmental assessment study carried out under the project will assess the risks and mitigating measures to be taken to safeguards against such risks. The establishment and operation of cinchona plantations will require that special care needs to be taken in preserving the precious natural resources of Madagascar in particular the forest resources.However, given the fact that the plantations will be situated as buffer zones of pine tree forests on deforested slopes and hills resulting in increasing the catchment areas and reducing soil erosion the project will have a positive impact on the environment.•	Position of womenWomen in particular may benefit from the employment opportunities and will have preference in being employed for work in the nurseries and for the drying and shelling of the cinchona bark. Similarly, in the processing plant certain jobs such as administration, laboratory and technical assistance can be carried out by women and the joint venture will actively pursue employment opportunities for women.•	Impact on government/society levelImpact on government levelIn line with national and local regulations, the economic activities in the plantation and processing facility will be taxed and provide income for the local administrations. Local authorities will closely cooperate with the project and plantation owners in the establishment of road infrastructure, electricity as well as in improving health and education facilities. The export of the quinine derivates will further generate foreign currencies.Impact on society levelThe impact of the plantations on the socio-economic conditions and environment will be in particular noticeable. In most cases, access to the plantations will require improvement of the road infrastructure which will facilitate further economic activities and outlets for local produce. Moreover, the cinchona trunks and branches that have been shelled from the bark will be further processed to charcoal providing further income opportunities for the rural population. Plantation owners will take direct responsibility also in the social development of the communities involved and should take care that education and health facilities will be established or improved.•	Impact on food safetyThe project will not contribute to the issue of food security.•	Impact on waterDue to the fact that the plantations contribute to increase the catchment areas of rivers, indirectly the project will contribute to the availability of water.•	Impact on the local shareholders positionAs a result of the project the local partner will be able to share the already existing infrastructure with the new project; these facilities will be used in a more effective way: selling excess steam, heat and electricity as well as other infrastructure activities will generate extra income for the Artisemina plant. The aim of the project is to establish a cinchona bark processing plant in Fianarantsoa to produce 73 Mtons of totaquina (the quinine precursor) annually. In addition, a 150,000 cinchona-seedling nursery will also be developed.