Vivero Los Viñedos

Debt : September 2024

BIO has granted a USD 9 M loan to Vivero Los Viñedos, a Peruvian plant nursery business

Amount

$ 9,000,000.00

Type of investment

Debt

Development impacts

Local economic growth
Private sector consolidation/innovation
Fight against climate change

Beneficiary locations

Latin America and Caribbean: Peru

Investment field

Enterprises

Activity

A01.30 Plant propagation

Organisation

Vivero Los Viñedos

Website

https://vlv.pe/

Domicile

Peru

Vivero Los Viñedos is a plant nursery business operating in three locations across the Peruvian coastal region, active in the propagation of fruit and vegetable plants, and the production of grapes. The company was founded in 1994 by Mercedes Auris de Munive, an agricultural engineer with a farming background, who saw a need in the market for the propagation of more resilient and productive plant varieties to reduce production losses due to plant diseases, and increase farmer yields.

The proposed transaction combines investments in

the company’s nursery to add a vegetable propagation line and expand laboratory capacities,
the company’s vineyard in the north of the country to expand its grape production,
for refinancing of previous capex and
to provide permanent working capital.

This is an opportunity for BIO to support a woman-led, established agri SME with a high degree of innovation and technological expertise that is constantly seeking to pioneer new propagation methods in the country and modernize the agri value chain.

VLV manages two business lines, a plant nursery for fruit and vegetable seedlings, and the production and distribution of grapes.

Furthermore, laboratories are used for in vitro propagation, molecular diagnostics, and the production of organic inputs. The company also runs test plots where they observe the behaviour of different varieties. The propagation of plants is a very precise process, requiring the company to maintain production protocols for each crop. The biggest product lines are grapevine, avocado, and citrus. In 2023, the client launched a propagation line for vegetables such as artichoke and peppers.

Development impacts

Local economic growth
Contributing to job creation, especially in the northern region.
Supporting quality employment of low-skilled workers and expanding access to formal jobs for the local and rural population.
Supporting the direct (grape production) and indirect (plant nursery) stimulation of export and increase of exported products' quality and, consequently, value
Private sector consolidation/innovation
Supporting the growth of an SME with a high level of know-how, technical expertise, and pioneering in the sector in R&D. Best player in terms of innovation in the sector, advanced laboratory activity about phytopathology, in-vitro propagation, biological agri-inputs production (e.g., trichoderma) and plant varieties testing.

Supporting the expansion of the range of products offered (vegetables and blueberries lines), mainly to the benefit of local smallholder farmers. Know-how transfer and technical assistance provided as part of the standard after-sale services, formally (medium to big clients) or informally (smaller clients). Supporting a family-run SME in its journey towards formalization.
Fight against climate change
VLV has integrated climate-smart and environmental sustainability practices as part of its core activities, e.g. water use efficiency through drip irrigation and progressive introduction of biological inputs. The company adapts to climate change through adopting stronger (more resistant) varieties of fruits for both plant nursery and grape production, path digging between grape lines to drain excess water in case of heavy rainfall, and diversification of plant nursery business lines.

E&S Impact

VLV will:

Finalise the processes to get the environmental certificate for their operations;
improve its environmental and social management system (ESMS) and procedures;
formalise the stakeholders' engagement plan and create a grievance mechanism;
upgrade the pollution prevention measures;
undertake a third-party assessment to ensure communities living around the extension projects are not affected;
undertake a third-party biodiversity assessment for their current and future activities.

Situation at the time of investment

VLV has a series of corporate policies in place, including on environmental and social aspects such as an Induction Policy for new personnel approved, a Health, Safety and Environment Policy, a Human Rights Policy and has an Occupational Health and Safety Committee in place made up of representatives of the company, employees, and workers. In terms of production, VLV Sullana has the GLOBAL GAP certification for grapes. Some pollution prevention measures are in place but will need to be improved.

Risk Category: B