EcoGreen evaluation (English)

Ecogreen is an oleochemicals manufacturing company that processes palm kernel oil and coconut oil to produce fatty acids, fatty alcohols, and glycerine. These products are used in detergents, soaps, and other personal care products. The company was established...  See More + Ecogreen is an oleochemicals manufacturing company that processes palm kernel oil and coconut oil to produce fatty acids, fatty alcohols, and glycerine. These products are used in detergents, soaps, and other personal care products. The company was established in 1988 with a plant in Medan, and has since expanded to also have a manufacturing facility in Batam. Ecogreen has export markets across Asia Pacific, the US, Latin America, and Europe.IFC currently utilizes a system to measure the development impact of its investments called the Development Outcomes Tracking System (DOTS). However, DOTS captures only one layer of the impact made through private investment – the direct jobs created or supported. Investments also create and impact indirect jobs, for example, along the supply chain. Furthermore, the local economy of an investment could be benefitted through additional demand for goods and services by the influx of workers. We call this positive spillover “induced impact”. In order to better understand not only direct impact of IFC investments, but both indirect and induced impact, the Manufacturing, Agribusiness and Services (MAS) Department of IFC is undertaking two linked studies. The first study examines the effect of three IFC investments on indirect jobs. This paper constitutes the second study, which seeks to assess induced impact of one of these investments, in Ecogreen Oleochemicals. This evaluation demonstrates that investments in skilled labor can have positive spillover effects to the local economy. It also represents the first time the IFC has used econometric methods and survey data to understand induced impact. This evaluation therefore also provides a methodological example for how the IFC can evaluate its impact in the future.  See Less -