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| Summary of Project Information (SPI) |
| 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. Board dates are estimates only. |
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| Project number | 20476 |
| Project name | Borusan Corp 1 |
| Country | Turkey |
| Sector | Primary Metals |
| Department | Global Manufacturing & Services |
| Company name | Borusan Holding A.S. |
| Environmental category | B |
| Date SPI disclosed | May 15, 2003 |
| Projected board date | July 18, 2003 |
| Status | Completed |
| Previous Events | Invested: March 30, 2004
Signed: February 20, 2004
Approved: February 6, 2004 |
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| Description of company and purpose of project |
Borusan Group is a major Turkish company involved in steel and pipe production, distribution of automobiles and heavy construction equipment, a logistics company and in new technologies. The proposed project consists of:
- restructuring the balance sheet;
- implementing a number of corporate initiatives to improve productivity; and
- strengthening corporate governance.
The objective is to improve the company’s overall operational and financial performance. Borusan Group is organized into five divisions:
- Steel Pipe Division:
comprising three companies which together represent one of the top five pipe manufacturers in Europe;
- Distribution Division:
comprising the sales and support for Caterpillar construction and earth moving equipment and power systems and also BMW and Land Rover passenger vehicles;
- Flat Steel Division:
which includes Borçelik, an IFC client, with cold-rolling steel operations;
-Logistics Division:
which provides logistics, domestic and international transport, port, warehousing and other services to third parties; and,
- Technology Division:
offering LAN, alternative telecom and other IT services and taking partnerships in high growth IT and telecom companies.
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| Project sponsor and major shareholders of project company |
Borusan Group is organized under a Holding structure, which acts as a parent for its operating subsidiaries. The Borusan Holding is owned by members of Kocabiyik family and is privately held. Borusan history began in 1944 with İstikbal Ticaret, a trading company. By 1972, after integrating steel pipe operations, all Borusan companies were brought together under Borusan Holding. In the 80's Borusan entered a new sector, distributorship, by becoming the Turkish representative for BMW passenger vehicles, as well as for Caterpillar professional earth moving equipment and power systems as the brand's sole representative in Turkey, Azerbaijan, Georgia and Kazakhstan. The 90's also marked the founding of Borçelik, Turkey's first private sector manufacturer of cold rolled flat steel. The partnership with Mannesmann in 1998 placed Borusan among the top five steel pipe producers in Europe.
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| Total project cost and proposed IFC investment |
IFC’s proposed investment is up to $40 million long-term loans on IFC’s own account and syndicated loans.
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| Location of project and description of site |
Borusan Group is headquartered in Istanbul, Turkey. Most of the operations are located in Istanbul and within the Marmara region. The Distributorship Division has its representations across the country as well as CIS.
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| Project Development Impact and IFC's Role |
- Borusan Holding is one of the second tier corporations in Turkey. However, IFC’s track record with its most prominent and profitable operations has been excellent: Borusan’s pipe division since 1976 and Borçelik since 1994. As the Group prepares for the next stage in its evolution against the backdrop of economic and political uncertainty in Turkey, it need access to stable long-term financing. Long-term financing in Turkey is virtually nonexistent, limited to only supplier financing, a problem which is exacerbated in the current crisis environment.
- The project includes the implementation of important corporate initiatives as described above, which will build on an established base of achievements in these areas: Group companies already hold various quality certifications, such as ISO 9001, ISO 9002, ISO 14001, OHSAS 18001, QS 9000; in addition, Borçelik has won the European Foundation for Quality Management (EFQM) excellence model award.
- The project will strengthen a group employing 3,400 people, most of which are based outside of Istanbul.
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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.
To view the environmental documents for this project, click here |
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| Location of environmental documents in locally affected community |
Environmental Review Summary has been announced on May 9 , 2003 in local papers in Istanbul Ticaret Gazetesi, Bursa Hakimiyet Gazetesi and Özgür Kocaeli Gazetesi and made available at the premises of Borusan Holding at the following address:
Borusan Holding A.S. Meclisi Mebusan Caddesi 103 Salipazari 80040 Istanbul –Turkey Phone: (90 212) 251 34 10 / 506 Fax: (90 212) 249 32 05
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| To contact the project company, please write to: |
Dr. Erkin Erimez
Borusan Holding A.S. Meclisi Mebusan Caddesi 103 Salipazari 80040 Istanbul –Turkey Phone: (90 212) 251 34 10 / 506 Fax: (90 212) 249 32 05
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