|
|  |
| 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. |
 | |
| Project number | 24478 |
| Project name | Fertial Phase I |
| Country | Algeria |
| Sector | Chemicals |
| Department | Oil, Gas, Mining And Chemicals |
| Company name | Societe des Fertilisants d'Algerie |
| Environmental category | B |
| Date SPI disclosed | March 27, 2006 |
| Projected board date | April 27, 2006 |
| Status | Pending Disbursement |
| Previous Events | Signed: June 23, 2006
Approved: April 27, 2006 |
|
| Description of company and purpose of project |
In January 2005, Alzofert and Fertial, two subsidiaries of Asmidal, the state-owned Algerian fertilizer company, were merged creating one company (Fertial or the company.) Subsequently, in August 4, 2005, the company was privatized to Grupo Villar Mir of Spain (the sponsor). This was done via a capital increase resulting in the sponsor having 66% of the shares. The sponsor is undertaking an investment in the company in two separate phases:
- Phase I involves a $167 million investment program in Fertial’s existing operations; and
- Phase II involves the construction of a new ammonia line with a capacity of 1.1 million tons per annum (tpa).
Fertial is the largest fertilizer company in Algeria and is involved in the production, trading and the development of ammonia-based fertilizers and its derivatives. The company has a combined capacity of 990,000 tons per annum (tpa) of ammonia; 660,000 tpa of nitric acid, 825,000 tpa of ammonium nitrate, 198,000 tpa of Urea Ammonium Nitrate (UAN) and 740,000 tpa of phosphatic-based fertilizers (NPK, PK, TSP, NP, SSP).
The project under consideration involves Phase I of the sponsor’s investment program which is aimed at improving productivity and bringing its environmental performance up to IFC/World Bank standards. Fertiberia, one of the GVM’s wholly owned subsidiaries, and the largest fertilizer producer in Spain is serving as operational partner for the project.
The sponsor’s strong technical expertise will enable Fertial to gradually improve efficiency and reduce the full cost per ton of output. The investment program as part of Phase I will improve the operational, environmental and technical performance of the facilities. Phase II of the investment program is in the process of being developed and will be conducted in parallel with Phase I. The Summary Project Information for Phase II will be disclosed at a later date. |
|
| Project sponsor and major shareholders of project company |
Established in 1987, Grupo Villar Mir (GVM) is the largest Spanish family-owned industrial group with international activities. Its worldwide presence covers Latin America, North America, Africa, Europe, Asia and Australia in its various activities. GVM is involved in construction, property, fertilizers, ferro-alloys, energy production, engineering and IT systems.
The main companies that comprise GVM are:
- Promotion Y Propiedades Immobiliarias Espacio;
- Ferroatlantica, which is the largest producer of ferro-alloys in the European Union as well as the largest independent producer of hydroelectric energy in Spain;
- Fertiberia; and
- Obrascom Huarte Lain which is the sixth largest construction company in Spain and the eighth largest private infrastructure concession operator worldwide.
Fertiberia, the operational partner, is the largest producer of fertilizers in Spain and fourth largest in the EU. It has been part of the Villar Mir Group since 1995. Fertiberia has a total of 5 plants all located in Spain with a total installed capacity of 5.5 million tons per annum (tpa), which is about 75% of total installed capacity in Spain. The combination of Fertial and Fertiberia will be the largest fertilizer producer in the Mediterranean region. |
|
| Total project cost and proposed IFC investment |
| Total project cost is approximately $167 million. The proposed IFC Investment is an equity investment of $24 million. |
|
| Location of project and description of site |
Fertial’s operations are located at two separate sites on the northern coast of the country. The largest, the Arzew facility is located on the west coast in the Oran industrial zone 350 km west of Algiers where there is a dedicated petrochemical complex. The Arzew complex has two ammonia plants with a combined capacity of 660,000 tpa, 396,000 tpa of nitric acid and 396,000 tpa of ammonium nitrate.
The company’s headquarters is located at the Annaba facility which is at the Annaba industrial complex on the east coast of Algeria, 440 km east of Algiers. This complex has one ammonia unit with a capacity of 330,000 tpa, 660,000 tpa of NPK, 264,000 tpa of nitric acid, 330,000 tpa of ammonium nitrate, 396,000 tpa of SSP and 264,000 tpa of UAN. |
|
| Project Development Impact and IFC's Role |
This project will contribute to the economic objective of increasing the role of the private sector in Algeria through both the attraction of foreign investments and the implementation of the privatization program of the government.
While Algeria has seen significant foreign investment in the oil & gas sector, there has been limited interest in the chemical sector until recently, resulting from the push towards the privatization of existing assets, as well as with the adoption of the new hydrocarbons law.
This project will be the first major project in the chemical sector in Algeria to be sponsored by a foreign investor and will, hence, serve an important demonstration effect for the future development of the sector. As such, it will also be an instrument for diversification of investments from the oil sector.
In addition, Grupo Villar Mir is committed to the work force (including a pledge to the retention of the current labor force), a point that is high on the government’s agenda in the current context of high-unemployment in the country. Grupo Villar Mir has committed to important investments to help improve the company’s operations including putting in place a management structure as well as an integrated MIS system.
Lastly, part of the project includes a component to support the local agricultural community whereby the sponsor has committed to provide technical assistance to the Algerian primary agricultural sector on best practices in the use of fertilizers, both in terms of productivity and sustainability.
IFC’s key role in the project includes:
- Assisting the sponsor with the financial structuring that will be needed for Phase II;
- Provision of strategic long-term equity investment;
- Assisting the company in devising an environmental action plan; and
- Assisting the sponsor in developing an SME program geared towards the Algerian agricultural community. |
|
| Environmental and social issues - Category B |
This project is categorized as B according to IFC's procedures because impacts are minimal and can be mitigated. Key environmental issues to be considered include EHS management capability, air emissions, effluent treatment/discharge, hazardous materials management, solid/hazardous waste management and disposal, cleaner production, and impact to natural habitats and local communities. Occupational health and safety (OHS) issues include fire safety and explosion prevention, emergency preparedness and response, and general employee health, safety and training; as well as relevant supply chain (i. e., contractors, suppliers) aspects.
To view the environmental documents for this project, click here |
|
| Location of environmental documents in locally affected community |
| The Environmental Review Summary (ERS) will be translated in French and Arabic, and posted at the city halls in Arzew, Bethiuoa, Annaba and El Bouni . |
|
| To contact the project company, please write to: |
Jose Maria Estruch Esteban, Managing Director
Fertial
Route des alines B.P. 326
Annaba 23000
Phone: 213 38 52 30 02
Fax: 213 38 52 24 00 |
|
|
|