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Chew’s Agriculture signs 10-year S$27m sustainability-linked loan with DBS
EGG producer Chew’s Agriculture has signed a 10-year, S$27 million sustainability-linked loan with DBS Bank, to construct a new farm with larger cage-free facilities.
This ensures that hens laying eggs on its farm will continue to be housed in optimal conditions – which include larger litter areas and elevated perches, the lender said on Wednesday.
The egg producer will also enjoy lower interest rates if it meets Humane Farm Animal Care (HFAC) standards.
This means providing wholesome and nutritious feed to its livestock, having the appropriate environmental design, as well as caring and responsible planning and management of livestock. It will also need to have "skilled, knowledgeable conscientious animal care, factors which contribute to more nutritious eggs".
Chew’s Agriculture supplies 500,000 eggs a day, 95 per cent of which are distributed in Singapore.
Its loan with DBS was evaluated based on a series of environmental, social and governance (ESG) performance metrics, DBS said.
Said Edvin Lim, director of Chew’s Agriculture: "Through incorporating HFAC standards, we are not only ensuring the well-being of our layer hens, but improving the quality of the eggs that they produce. It is a win-win solution that definitely sets a new benchmark for how we run our business.”
He added that demand for nutritious eggs produced in the right environment has become more important as consumers become more health and eco-conscious. Thus, providing products which are responsibly produced and ethically farmed will ensure Chew’s Agriculture keeps up with the expectations of its diverse customer base.
For its sustainability-linked loans, DBS said corporates are evaluated based on an annual sustainability review report typically assessed by an external independent party, tracking the performance of corporates in terms of governance, environmental and social criteria.
When borrowers meet or exceed predetermined ESG targets, their interest rates will be reduced.
DBS's head of SME banking Joyce Tee said that the bank expects sustainability-linked financing to increase in the SME sector, especially since these financing options incentivise and reward companies to advance their sustainability agenda.
"With growing awareness of the importance of sustainability, we continue to integrate responsible financing principles into our credit assessment processes and lending activities," Ms Tee added.
Last week, specialist engineering firm Acromec said its 80 per cent-owned unit will build, own and operate a waste-to-energy power plant at Chew's Agriculture's new poultry farm at Neo Tiew Road, off Lim Chu Kang. This was part of a push to diversify the company's business into renewable energy.
Under the 15-year agreement, Chew's Agriculture will supply its poultry waste to Acropower to convert into biogas to generate electricity, and Chew's Agriculture will purchase the electricity generated at agreed prices at no more than a 10 per cent discount to the prevailing Energy Market Authority electricity tariff rate.