Empresa Agroindustrial Laredo, S.A.A. Summary Of Project Information (SPI)       Project Name    Peru - Agroindustrial Laredo S.A.A.      RegionLatin America and Caribbean   Sector   Project No009615   Projected Board DateNovember 24, 1999   Company NameEmpresa Agroindustrial Laredo S.A.A. (Laredo)   Technical Partner and/or Major Shareholders    	Manuelita S.A., the second-largest sugar producer in Colombia and the most efficient, is both a majority shareholder in Laredo and technical partner to the company. Manuelita has been controlled by the Eder family for nearly 135 years.     Project Cost Including Proposed IFC Investment    	Project cost is US$51.5 million of which IFC will provide up to US$10 million as an A loan and US$5 million as a C loan. The Netherlands Development Finance Company (FMO) will provide up to US$13 million in parallel A and C loans.    Location of Project and Description of Site    	Trujillo, 560 km north of Lima, Peru. The site consists of 4,265 hectares of sugarcane fields and an existing sugar factory.    Description of Company and Purpose of Project    	Empresa Agroindustrial Laredo S.A.A. is a former sugar cooperative converted to corporate form under the government''s program to reform the sugar sector. Laredo owns 4,265 hectares of agricultural land in Trujillo, Peru and grows sugar on 3,636 hectares. The company produces raw sugar from its own cane, and cane supplied by independent growers, in a 2,000 ton/day factory.   The project consists of: (i) renewal and replanting of 2,900 ha of sugar cane fields; (ii) rehabilitation/expansion of an existing sugar mill to process up to 3,000 tons/day of sugarcane equivalent to 73,479 tons of refined sugar and; (iii) repayment of overdue retirement obligations and other labor costs and past due loans from suppliers.   By assisting with the conversion of the company from a cooperative to a publicly owned corporation, IFC supports the governments program to reform the sugar sector. IFC also fulfils its role in supporting private sector development by providing necessary financing (and mobilizing additional external funding from FMO) for the substantial investments the sector requires for rehabilitation and expansion of existing production infrastructure. The project will enhance agricultural productivity and improve management of natural resources.  In addition, IFC enables productivity improvements within the sector by facilitating technology transfer to Peru from the better-managed Colombian sugar industry.    Environmental Category and Issues    	This is a category B project according to IFCs environmental review procedure. Key issues considered during appraisal included: site acquisition and management; pesticide use and Integrated Pest Management; sustainability of water supply and water rights; waste water treatment; air emissions from the sugar mill; solid waste management; hazardous materials use; retrenchment of workforce and social commitments; and occupational health and safety issues.   The project will not affect areas of ecological or environmental significance and there will be no economic displacement or resettlement. The sponsor will protect and conserve all sites of archaeological significance that lie within the project boundaries and will implement an integrated pest management program.   Exploitation of irrigation water is sustainable and abstraction will not adversely affect downstream users. Currently there is excessive use of water within the mill site which is discharged directly to adjacent fields as irrigation water. Additionally, filter cake  and distillery waste are combined and discharged directly to an adjacent open watercourse without treatment.    Significant air emissions are apparent from each of the four boilers and the sponsor will replace all four boilers with a single new boiler (with appropriate pollution control equipment to achieve WBG requirements) by 2002. The sponsor has undertaken to install new equipment to address both air emission and waste water issues to IFCs satisfaction.   The mill site contains large amounts of solid waste.  The sponsor has begun to sort and dispose of this material and will recycle/re-use waste where possible. In instances where re-use is not possible, waste will be disposed of to local landfill. Several sources of hazardous material are evident and the sponsor has undertaken to ensure appropriate and safe use and disposal of all materials.   The sponsor has begun a program of retrenchment to reduce the labor force. This process has been undertaken in an open and transparent manner in accordance with Peruvian labor laws. The sponsor also acquired social assets (a hospital and three schools). The management and ownership of the schools have been transferred to government.  The hospital will be transferred to the local health authority or privatized. The sponsor has undertaken to maintain and improve contracts with local cane out-growers through the development of legal contracts with local suppliers and to commit to the purchase of cane.    The mill site does not currently comply with WBG health and safety requirements and the sponsor has already prepared a detailed risk assessment of health and safety issues at the mill and will develop and implement an occupational health and safety plan acceptable to IFC during the project.       The  is  from InfoShop.       Host country location of environmental documents    In several public and private institutions and offices including:   Municipal Office in Trujillo    Municipal Office in Laredo    Universidad Nacional de Trujillo   Rector: Dr. Guillermo Gil Malca   Diego de Almagro 344      Date SPI sent to InfoShop October 25, 1999   This Summary of Project Information is prepared and distributed to the public in advance of consideration of the proposed transaction by the Corporations Board of Directors.  It is provided for the purpose of enhancing the transparency of IFCs activities and should not be construed as presuming the outcome of IFC Board consideration.    For Additional Information contact:  Corporate Relations Unit -   telephone: (202) 473-7711   facsimile: (202) 974-4384  Environmental documents for this project are available at http://www.ifc.org and from the World Bank InfoShop (http://www.worldbank.org/html/pic/aboutinfo.html).