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| ZMZ-Bearings |
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| Summary of Proposed Investment |
| This Summary of Proposed Investment is prepared and distributed to the public in advance of the IFC Board of Directors’ consideration of the proposed transaction. Its purpose is to enhance the transparency of IFC’s activities, and this document should not be construed as presuming the outcome of the Board decision. Board dates are estimates only. |
| Project number | 25996 |
| Company name | Daido Metal Russia LLC |
| Country | Russian Federation |
| Sector | Industrial & Consumer Products |
| Environmental category | B |
| Department | Global Manufacturing & Services |
| Status | Active |
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| Date SPI disclosed | August 22, 2007 |
| Projected board date | September 24, 2007 |
| Previous Events | Invested: December 17, 2007
Signed: November 19, 2007
Approved: November 7, 2007 |
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| View Environmental & Social Review Summary (ESRS), click here |
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| Overview |
Sponsor/Cost/Location |
Development Impact |
Contacts |
Attachments |
| Project description |
| The project is to support Daido Metal Co. Ltd.'s (Daido Metal or the sponsor) entry into Russia through the acquisition of LLC ZMZ-Bearings (ZMZ-Bearings or the company), a leading local manufacturer of half bearings for automotive engines. ZMZ-Bearings, which started production of bearings in 1959, is the largest manufacturer of steel and aluminum strip and plain bearings for automobile engines in Russia and the CIS countries. Its major customers are domestic Original Equipment Manufacturers (OEMs) such as Avtovaz, GM- Avtovaz, GAZ and SeverstalAuto. |
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| Project sponsor and major shareholders of project company |
| The project sponsor is Daido Metal Co. Ltd., one of the top five global manufacturers of specialty engine shaft thin-wall bearings for automotive, ship engines and industrial applications. The Sponsor is a publicly traded company and is listed on the Tokyo and the Nagoya Stock Exchanges. Its main shareholders include: Mizuho Corporate Bank (4.9%), Bank of Tokyo-Mitsubishi UFJ (4.1%), and Tokio Marine & Nichido Fire Insurance Co. (3.8%). Non-Japanese shareholders together hold 11.3% of Daido Metal. |
| Total project cost and amount and nature of IFC's investment |
| The total project cost is estimated to be about $20 million. IFC is considering an A Loan in the amount of $5 million to facilitate the acquisition of the company and the purchase of leased assets. |
| Location of project and description of site |
| ZMZ-Bearings is located in Zavolzhie, Novgorod Oblast about 55 KM north of Nizhny Novgorod. The company has one facility on 38 thousand square meters of land which includes 24 thousand square meters of factory space. |
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| Anticipated development impact of the project |
The project will introduce the up-to-date technology and high-quality manufacturing standards of a Tier 1 parts supplier into Russia. In addition, the following should be noted:
- The project will demonstrate that all Japanese automotive parts manufacturers do not have to locate near to St. Petersburg under the auspices of Toyota and will thus help to move these types of investments to regions outside of this area.
- Daido Metal will likely improve the quality and the productivity of the operation. This could have a positive effect on the Nizhny region to attract other automotive industry investment.
- The presence of a Japanese car parts producer will have positive spin off effects for the region's industry. Daido Metal will introduce new efficiency and quality methods which will be a great example to the regional factories. |
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| IFC's expected development contribution |
| IFC’s primary role in the proposed project will be to provide political risk mitigation to Daido Metal. IFC will also be supporting FDI in Russia. |
| Environmental and social issues - Category B |
| This is a Category B project according to IFC’s Procedure for Environmental and Social Review of Projects because a limited number of specific environmental and social impacts may result which can be avoided or mitigated by adhering to generally recognized performance standards, guidelines or design criteria. |
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| For inquiries about the project, contact: |
Mr. Hideo Yoshida, Joint General Manager
Daido Metal Ltd. Tokyo Office
17F Tannoz Central Tower 2-2-24
Higashi-Shinagawa, Shinagawa-ku,
Tokyo, 1400002, Japan
Telephone: +81-3-5462-3302
Fax: +91-3-5462-3310
Environmental documentation in the Russian language is available and can be obtained for review from:
Mr. Vladimir Sorokin, Director
LLC ZMZ-Bearings
Sovetskaya Str., 1a
Zavolzhie,
Nizhniy Novgorod Region
606522 Russia
Telephone: (83161) 67 236 |
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| For inquiries and comments about IFC, contact: |
General IFC Inquiries
IFC Corporate Relations
2121 Pennsylvania Avenue, NW
Washington DC 20433
Telephone: 202-473-3800
Fax: 202-974-4384
E Mail: Webmaster |
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