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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 | 22999 |
| Project name | Algerian Cement Corporation 2 |
| Country | Algeria |
| Sector | Nonmetallic Mineral Product Manufacturing |
| Department | Global Manufacturing & Services |
| Company name | Algerian Cement Company |
| Environmental category | B |
| Date SPI disclosed | May 13, 2004 |
| Projected board date | June 15, 2004 |
| Date revised SPI disclosed | June 2, 2004 |
| Status | Active |
| Previous Events | Invested: August 26, 2004
Signed: June 25, 2004
Approved: June 22, 2004 |
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| Description of company and purpose of project |
| Algerian Cement Company (ACC, or the company) is Algeria’s first and only private cement plant, and is an existing IFC client company. The project consists of increasing ACC’s capacity from 2.0 million tons per year (“tpy”) to 4.0 million tpy, at an estimated cost of $187 million (named Line II). The project represents the second phase of the original ACC project (Line I), which was completed in February 2004 within budget and in a record time of 22 months. The project will be a replicate of the original 2.0 million tpy production line which was supplied by F.L. Smidth (FLS), Denmark. It will be adjacent to Line I at ACC’s production site in Msila, central Algeria, 240 km southeast of Algiers, and will share site infrastructure and utilities already developed for Line I. Construction for Line II started in January 2004 and is expected to be completed in 20 months. |
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| Project sponsor and major shareholders of project company |
The project's sponsor is Orascom Construction Industries (OCI), Egypt's largest private sector construction conglomerate and a listed company. OCI is part of the Orascom Group controlled by the Sawiris family, one of Egypt's leading business families. The Orascom Group is a diversified group consisting of three main holding companies: Orascom Projects and Tourism Development (OPTD), for tourism-related investments; Orascom Technologies (OT), for telecom, cellular services and information technology; and Orascom Construction Industries (OCI).
OCI has three main business lines:
- Construction, providing civil and electro-mechanical engineering and construction services for projects in Egypt and the MENA region;
- Building Materials, comprising manufacturing of basic and specialized construction related products such as cement, cement bags and packaging, ready mixed concrete, concrete pipes, steel structures, aluminum and glass curtain walling, paints coatings and industrial gases, and
- Infrastructure, consisting mainly of the development of an industrial park and the adjacent port facility in the Ain Sokhna area, and a minority shareholding in a natural gas distribution business. OCI currently has investments in 13 companies including:
- its flagship – Egyptian Cement Company (ECC), a joint venture between OCI and Holcim of Switzerland, with an annual capacity of 7 million tons; and
- Algerian Cement Company (ACC). |
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| Total project cost and proposed IFC investment |
| The total project cost is estimated at $187 million. The proposed IFC investment is a $20 million A Loan for IFC’s own account. |
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| Location of project and description of site |
The plant site is located near route CW25 (Bourdj Bourerdj – M'sila) about 25 kilometers north of M'sila, 7 kilometers south east of Hamman Dalaa. Wilaya of M'sila is in central Algeria some 240 kilometers from Algiers. The site is located on arid (rock dominated) land and the surrounding land is extremely marginal and is not used for agriculture or cultivation. The location was originally chosen based on technical evaluations and the result of a public consultation, including a focus on avoiding sensitive habitats and avoiding land otherwise used by the local population (hereby avoiding any resettlement), while being as near as possible to high quality raw materials. The sponsor has built a new site access road from the CW25 main road to avoid heavy traffic in the nearby settlement (Debil). Private landowners provided right-of-way access for this purpose and were consulted and provided compensation based on a willing-buyer willing-seller basis. There has been no further physical resettlement or economic displacement caused by the initial project or its infrastructure connections and the expansion will be kept within the existing plant area.
The limestone quarry, which is in operation, is located adjacent to the plant, while the clay quarry is located 17 kilometers from the plant site. High quality gypsum is currently bought from domestic commodity suppliers (there are several supply options), but might later be supplied from deposit located 180 kilometers from the plant site. The project includes progressive quarry reclamation plans for gradual implementation during the lifetime of the quarries. As an example the limestone quarry has till date had 3,000 m2 of overburden removed and stored for later application in connection with reclamation to create a landscape (profile) in harmony with the existing and surrounding landscape. |
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| Project Development Impact and IFC's Role |
| The project is expected to further improve the productivity and competitiveness of Algeria’s largest and lowest-cost cement producer. The project is expected to have a production cost of $25 per ton which compares favorably with a duty-free import price for cement of about $52 per ton (tariffs are 15 percent and result in a duty-inclusive cost of $60 per ton). The project will also support the viability of an important source of employment for 578 people (for Line I and Line II) in the M’Sila region where unemployment is in excess of 20%. In addition, the environmental and safety standards adopted by the plant will continue to set a benchmark for the cement sector which is still dominated by old and inefficient state companies. Finally, the project will continue 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. |
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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 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 following potential environment, health and safety and social impacts of the projects were analyzed.
- Post construction evaluation of the suitability of the original site selection;
- Established site access;
- Quarry operation and reclamation planning;
- Final technology evaluation for both the existing cement manufacturing facility and the proposed expansion project;
- Water management and green belt planning;
- Social impacts and management of potential influx of people in local area;
- Labor standards and hiring principles;
- Environmental Management System development; and
- Public consultation practice.
To view the environmental documents for this project, click here |
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| Location of environmental documents in locally affected community |
Environmental documents will be made available at the following locations:
Municipality (Wilaya) of Hamma Dalaa, and
at the plant site in Msila. |
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| To contact the project company, please write to: |
Algerian Cement Company (ACC),
3 Bis rue Raoul Payen,
Hydra, Alger. |
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