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| This Summary of Project Information 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. |
Summary of Project Information (SPI) |
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| Project number | 10371 |
| Project name | Algerian Cement Company |
| Country | Algeria |
| Sector | Nonmetallic Mineral Product Manufacturing |
| Department | Global Manufacturing & Services |
| Company name | Algerian Cement Company |
| Environmental category | B |
| Date SPI disclosed | March 29, 2002 |
| Projected board date | May 2, 2002 |
| Status | Active |
| Previous Events | Invested: April 11, 2003
Signed: November 25, 2002
Approved: June 28, 2002 |
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| Project sponsor and major shareholders of project company |
| The project's main sponsor is Orascom Construction Industries (OCI). OCI is Egypt’s largest private sector construction conglomerate and is part of the Orascom Group controlled by the Sawiris family, one of Egypt’s prime business families. OCI will initially owns 100% of the Algerian Cement Company (ACC), the project company. OCI has plans to bring into the project strategic partners such as Holcim and/or local groups at a later stage. |
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| Total project cost and proposed IFC investment |
| Total project cost is estimated at $260 million. The proposed IFC's investment is a $35 million loan for its own account (or guarantee of local loans of the same amount). |
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| Location of project and description of site |
| The plant will be located on the west side of route CW25 (Bourdj Bourerdj - M'Sila) about 25 kilometers north of M'Sila, 7 km southeast of Hammam Dalaa. The wilaya of M'Sila is located in Central Algeria, some 240 km south-east of Algiers. |
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| Description of company and purpose of project |
- Description and Purpose:
The project is to construct and operate Algeria's first private sector cement plant with total capacity of 2.0 million tons per year (tpy). The project company, Algerian Cement Company (ACC) will use locally available raw materials and inexpensive energy sources to produce and distribute cement in the M'Sila and neighboring region.
- Development Impact:
The benefits of the project to the economy arise from:
- tax revenues generated from the corporate tax levied on the company;
- employment generation and incremental earnings of labor - 1,800 semi- and un-skilled jobs will be created during the life of the project at a wage premium of 30% above the prevailing market wage; and
- consumer surplus resulting from the project’s ability to drive cement market prices down as low which will greatly benefit consumers who are presently paying high cement prices.
Moreover, the venture is expected to have substantial spill-over economic benefits, such as attracting other industries to M’Sila and helping create a more vibrant building materials and construction industry in the country.
- IFC's Role:
First, IFC will provide long-term financing, which is unavailable in Algeria. Second, IFC has played a catalytic role in mobilizing financing and guarantees from other international as well as local financial institutions. Third, IFC will play a major developmental role by ensuring that the project meets World Bank environmental and safety guidelines. The investment will serve as a model in pollution and dust emission control in Algeria and will be the first cement plant in the country to meet the latest most stringent international environmental guidelines. Finally, IFC’s presence in a major project involving a foreign sponsor also supports the Algerian government’s efforts to attract foreign investment in the non-oil sectors. |
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| 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. The categorization was selected after a thorough project review, which confirmed the project’s ability to remain within the definition of a Category B project. The review of this project consisted of appraising technical and environmental/social information submitted by the project sponsor, as well as IFC staff site visits to the plant site, supporting quarries and impacted communities. The potential environmental, health and safety and social impacts of the project were broadly analyzed and the following were found most important:
- Site selection criteria;
- Prior and existing site use;
- Planned use of appropriate technology;
- Air emission control;
- Water and wastewater management;
- Solid waste minimization;
- Land reclamation;
- Development of local supply chain/SMEs;
- Construction impacts and management of potential influx of people in local area;
- Local employment and hiring plans, labor standards and training;
- Assurance that harmful child labor will not be allowed on any project site; and
- Public consultation and disclosure of information.
To view the environmental documents for this project, click here
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| Location of environmental documents in locally affected community |
| Environmental Documents (ERS) are located in the following locations: (i) in the District Office of the town of Hammam Dalaa; and (ii) in the Office of the Wilaya (city-hall) of the city of M'Sila. |
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| To contact the project company, please write to: |
Nassef Sawiris- CEO of OCI
160, 26th July Street, P.O. Box 1191, Agouza
Cairo, Egypt
Telephone: 202 302-6930
Fax: (202) 303-0506 |
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