Sustainable CaseDelverde Case: Usina Cerradinho Oaniela Mariuzzo is to make South America less dependent for funding, especially now that it is a separate region within the bank. "That regional separation is a recognition of the importance of South America to Rabobank International's focus on F&A," confirms Bilbao. "A key challenge for us is turning our rural and retail relationships into deposit gathering relationships as well. We have to figure out ways to raise our local funding. Do we try and match country for country, or do we use certain countries as fund gatherers for countries with more limited relations with customers? What you try to do as a bank in a foreign country is to fund local exposure locally. Rabobank in South America today has most of its exposure in dollars. We have to solve that ongoing challenge on an organisational level, while recognising that our access to dollars has always given us an advantage in the region and especially in the past 18 months. Nevertheless, it's an issue that affects us as we are building our business in these countries. To keep our growth balanced we have to try and fund more loans in local currencies. That is what our local teams are doing: expanding our excellent wholesale franchise as well as looking for rural and retail F&A opportunities as the domestic economies continue to perform well."» Rabobank was instrumental in the recent takeover of the Italian pasta manufacturer Delverde by the largest branded food company in Argentina, Molinos Rio de la Plata. "This shows that the credit crisis is also an opportunity for cash-rich companies," suggests Jorge Correa of Rabobank Argentina. "As the biggest exporter of oil and food products in Argentina, Molinos Rio de la Plata is in a position to expand on an international scale. And it is obvious why Molinos would do these deals with the assistance of a bank that has extended expertise in F&A, and a presence in all major markets." Usina Cerradinho is a family-owned sugar mill that Rabobank Brazil has been financing since 2002. In that period they have grown their production six- or sevenfold, although during the credit crisis the company had to deal with a drop in prices and a fluctuating dollar. "It got to the point where they were in real distress," explains Henrique Costa of Rabobank Brazil. "We took charge of getting the largest lenders around the table and setting up a new deal to rearrange their debt in a syndicated facility. The whole company had to be restructured, under new management. A very stressful situation, especially since we had to reassure the other banks that there is a future for the company. Strictly speaking this is a problem loan, but we know that Usina Cerradinho will show better results as soon as the market moves up again." Five years ago Rabobank Brazil initiated a new project that would now be considered part of our corporate social responsibility. At the time, Rabobank Brazil was already aware that its involvement with farmers and agribusiness in sensitive natural areas, such as the Amazon biome, required a more proactive approach in achieving sustainable farming. Over the years, that initiative has evolved into a company- wide CSR policy, wherein Rabobank makes an annual assessment of the environmental and social impact of every individual loan and cliënt, corporate and rural. "We are not just assessing risks, we are actively engaging with our clients to promote yearly improvement," explains Daniela Mariuzzo, one of Rabobank's experts in sustainability. "We have published a booklet with practical CSR guidelines that are designed to be understood by every farmer in the field. Customers that fail to comply or to progress towards compliance risk being excluded from our services. But our programme also includes the possibility of incentives for clients that reach a certain level of sustainability, including lower interest rates. The whole approach is not just a paper exercise; we have a group of ten assessment team operatives (ATOs) who visit farms to register their progress on so-called CSR-scores. We invite customers of our rural branches to visit Sustainable Field Days to see how best practices are implemented by farmers with a better CSR score." Some people might argue that it is not a bankers job to rate customers on CSR scores. Daniela Mariuzzo explains why she doesn't agree. "Brazil has a very strong environmental and labour legislation, but there is a gap between the law and a farmer's daily reality. By stepping in, Rabobank Brazil helps farmers comply with the law. Most of our customers appreciate that kind of engagement. We are the only bank in the world that sends field workers to farmers to help them achieve environmental and social goals. Rabobank has an interest in setting those standards, because we aim for long term relationships. Our long-term profits are at risk if we do not promote sustainable farming." issue 22 THE WORD 2

Rabobank Bronnenarchief

blad 'RI The Word / The Word' (EN) | 2010 | | pagina 29