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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 | 9725 |
| Project name | Seament |
| Country | Albania |
| Sector | Nonmetallic Mineral Product Manufacturing |
| Department | Global Manufacturing & Services |
| Company name | Seament |
| Environmental category | B |
| Date SPI disclosed | March 2, 2001 |
| Projected board date | April 5, 2001 |
| Status | Completed |
| Previous Events | Signed: April 24, 2001
Approved: April 12, 2001 |
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| Project sponsor and major shareholders of project company |
| The project sponsor is Seament Holding, S.A.L (Seament Holding), a family-owned company based in Lebanon that has been in the cement trading business for over 30 years. The sponsor controls, directly or indirectly, 22 companies world-wide and has minority stakes in several others. The sponsor invented the concept of floating terminals to handle bulk cement, and presently owns the largest privately held fleet of cement transport ships and floating terminals in the world. Seament Albania, a cement trading and marketing company in Albania, is a wholly-owned subsidiary of Seament Holding and operates a fixed terminal at Durres. At present, Seament Albania owns 77% of Elbasan Cement Factory (ECF) and 86% of United Quarries (UQ). |
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| Total project cost and proposed IFC investment |
| The total project cost is estimated at US$61.4 million. The proposed IFC investment is a US$15 million A loan for IFC's own account. |
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| Location of project and description of site |
| ECF is located on the outskirts of the city of Elbasan, approximately 60 km southwest of Tirana, Albania, between an industrial area and the town itself. ECF is located in a semi-rural area and is surrounded by small agricultural holdings together with a few detached residences. The limestone quarry, located approximately 4 km to the northeast of ECF, delivers limestone via an aerial ropeway. The clay quarry, located approximately 8 km to the west of ECF, delivers the clay to the plant via the public road system. |
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| Description of company and purpose of project |
Seament Holding established a terminal in the port of Durres and started its import activities in 1994. In March 1997, the company participated in a privatization tender and acquired a 70% interest in ECF and a 70% stake in UQ from the Government of Albania. In January 1999, the sponsor constructed a fixed land terminal at Durres, and in August 2000, Seament increased its holdings in ECF from 70% to 77% and in UQ from 70% to 86%. The remaining 23% of the shares of ECF and the remaining 14% of the shares in UQ are still held by the Government of Albania.
The proposed US$61.4 million project is to provide for substantial rehabilitation, modernization and environmental improvement of the company's cement production facilities in Albania, including the construction of a dry process kiln line to expand the production capacity of ECF from the present 185,000 tons per annum (tpa) of cement to approximately 775,000 tpa.
The project provides an opportunity to support the largest potential foreign direct investment in Albania as well as to help Albania reduce its reliance on more expensive imported cement by substituting high quality domestic product. The underdeveloped financial system in Albania is not able to provide the sponsor with access to adequate medium-term or long-term financing. Albanian banks do not have the capacity nor the term structure to provide medium-term to long-term financing for a US$61.4 million project. More generally, by providing long-term financing, IFC demonstrates that limited-recourse financing is possible in Albania, and creates a model for future transactions. Equally important to providing financing, IFC's participation would strongly support a project in a relatively neglected general manufacturing industry that is crucial to the development of Albania's economy. IFC’s investment would play an important role in assisting a company whose modernization would have a substantial positive impact on the economic development of the city of Elbasan.
The project represents a case where the majority ownership interest in a former state-owned, dilapidated manufacturing plant has been acquired by foreign investors, who have demonstrated their commitment to the newly formed company and the country by planning to undertake such a comprehensive modernization program. In addition, the company has restructured the operation's labor profile and has managed to productively employ over 600 persons. Significant investment has been made in training the local labor force in modern manufacturing and management techniques, while implementing environmental and employee health and safety improvement measures. The transfer of managerial and technical skills to the local employees and the introduction of modern efficient technology will contribute to the developmental impact. The project will boost competition in the cement industry, which will result in better quality cement and lower prices in the market for construction materials.
Finally, as the project is expected to replace imported cement, this will positively impact Albania's current account deficit. The investment climate in Albania remains difficult and the project is one of few direct investments being undertaken in the country at present. The project has the potential to yield a strong demonstration effect and contribute to rebuilding foreign investors’ confidence. It will also demonstrate how inefficient and unprofitable state-owned companies can be privatized and restructured effectively for the benefit of investors, employees and the country as a whole. |
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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/or 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 |
1. At the main gates of Elbasan Cement Factory: Fabrika e Cimentos Elbasan, Elbasan, Albania.
2. In the Elbasan Municipality office: Bashkia Elbasan, Elbasan, Albania. |
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| To contact the project company, please write to: |
Mr. Mark A. Bouri,
P.O. Box 101
Antelias, Lebanon |
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