Plantations et Huileries du Congo

Debt : December 2015

PHC is an established oil palm business in the DRC.

Amount

€ 9,741,280.77

Type of investment

Debt

Development impacts

Local economic growth
Food security & rural development
Promotion of ESG best practices

Beneficiary locations

Sub-Saharan Africa: Democratic Republic of Congo

Investment field

Enterprises

Activity

Agriculture - Edible oil

Organisation

Plantations et Huileries du Congo

Website

https://phc-drc.com/

Domicile

DRC

PHC has over one hundred years’ history and has three remote plantations in Lokutu, Yaligimba and Boteka, each located hundreds of kilometres from the nearest city and without any substantial infrastructure. After the government, PHC is the largest employer in the DRC, with around 9,000 permanent and temporary employees.

Feronia bought PHC from Unilever in 2009. At that time PHC was nearly extinct as a business, after having suffered years of underinvestment and disruption caused by conflict in the DRC. The two periods of major conflict, between 1996 and 2003, severely affected operations. Subsequently, while the business resumed operations, it went into a period of decline due to underinvestment and lack of strategic support from its parent company. During this period, the local senior management, many of whom still work for PHC, and a core staff of approximately 3,000 people kept the business running to the best of their ability, often at great personal risk.

Without Feronia’s intervention to buy PHC, and the subsequent investments from development finance institutions (DFIs) like BIO, it is highly unlikely that this historic company employing thousands of workers in a region where there is virtually no other formal employment would have survived.

In July 2020, KKM, a minority shareholder in Feronia, became majority shareholder through the injection of fresh capital. This gives PHC the necessary means to become a sustainable and profitable business.

As part of the agreement:

KKM will invest further capital into PHC’s operations
Feronia Inc will cease to exist on the Canadian stock market – significantly reducing the company’s administrative cost base
The DFI group of investors (CDC, FMO, BIO and DEG) will remain lenders to PHC
The ongoing Independent Complaints Mechanism mediation process for those communities that have expressed concerns about Feronia will continue with the support of KKM, CDC and the other DFI lenders
ESG spending to improve working conditions, enhance the local environment and provide education and medical facilities will be maintained by KKM and be independently audited.

The summary of the latest ESAP can be found on the website of PHC.

Development impacts

Local economic growth
Employment effects as PHC is by far the biggest employer in the area. The transaction secures 3,632 permanent and 2,000 seasonal jobs (1,000 full time equivalents). PHC estimates that a total of 45,000 people benefit economically and socially from its activities.

Net Export Effects: DRC is a major food importer, incl. palm oil. PHC’s production will substitute current imports
Food security & rural development
Local production of high-quality oil

Project will lead to important increase in local palm oil production capacity.

The transaction improves the access of the population in the DRC to goods of basic needs (food security / edible oil)
Promotion of ESG best practices
Lenders put in place an extensive action plan focusing on employment conditions, OHS, community involvement, health, education, etc.

Lenders put in place an extensive action plan focusing on protection of biodiversity and forests, waste management, etc.

Read impact and news about this project

News

A statement on the completion of the restructuring of Feronia / PHC

30-11-2020

In July it was announced that Feronia was facing bankruptcy and was to undergo a financial restructuring in order to secure the long-term future of PHC, its palm oil business located in the Democratic Republic of the Congo. On November 23rd, 2020, the formal restructuring agreement between the company and its lenders was signed.

News

Feronia/PHC - BIO’s mission is to invest in the most difficult places and circumstances.

25-11-2019

On the 25th of November, Human Rights Watch published a report on Feronia / PHC, and the DFIs who invested therein. Here you can find a joint statement from CDC Group, BIO, DEG, and FMO in response to the HRW report.

Financial Institutions

The Currency Exchange Fund n.v.

7,091,000.00

Bangladesh, Cambodia, India, Indonesia, Myanmar, Nepal, Pakistan, Philippines, Sri Lanka, Vietnam, Bolivia, Brazil, Colombia, Dominican Republic, Ecuador, El Salvador, Guatemala, Honduras, Nicaragua, Paraguay, Peru, Algeria, Egypt, Iraq, Jordan, Lebanon, Morocco, Syria, Tunisia, Palestinian Territories, Benin, Burkina Faso, Burundi, Cameroon, Côte d'Ivoire, Democratic Republic of Congo, Ethiopia, Ghana, Guinea, Kenya, Madagascar, Malawi, Mali, Mozambique, Niger, Nigeria, Rwanda, Senegal, South Africa, Tanzania, Uganda, Zambia

05/09/2007

Equity