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| VicatSagarCement |
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| Summary of Proposed Investment |
| This Summary of Proposed Investment 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 | 28350 |
| Company name | The Vicat Group |
| Country | India |
| Sector | Nonmetallic Mineral Product Manufacturing |
| Environmental category | A |
| Department | Global Manufacturing & Services |
| Status | Pend PDS-IR |
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| Date SPI disclosed | October 26, 2009 |
| Projected board date | December 29, 2009 |
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| View Environmental & Social Review Summary (ESRS), click here |
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| Overview |
Sponsor/Cost/Location |
Development Impact |
Contacts |
Attachments |
| Project description |
| The project consists of the first phase of a two-phase development program and involves the construction in Karnataka, India of a greenfield, state-of-the-art and energy efficient 2.7 million tons per annum (mtpa) integrated cement plant along with a 40 MW captive power plant, a waste heat recovery unit and necessary infrastructure to accommodate a doubling of the plant’s capacity when the two-phase program is completed in the future. The project is scheduled to start commercial operations in 2012. |
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| Project sponsor and major shareholders of project company |
| The project is being developed by a joint venture company Vicat Sagar Cement Limited (“Vicat Sagar”), whose shareholding structure is as follows: 51% Vicat SA (“Vicat”) and 49% Sagar Cements (“Sagar”). Vicat, the majority owner is a multi-regional manufacturer and distributor of cement, aggregates, ready-mix concrete and related building materials and has a cement production capacity of 18.6 mtpa spread over 11 countries. Vicat is listed on the Paris Stock Exchange. Sagar, the other main shareholder, is an experienced Indian cement manufacturer based in Hyderabad with a production capacity of 2.6 mtpa. It is listed on the National and Bombay Stock Exchange. |
| Total project cost and amount and nature of IFC's investment |
| Total Project cost is estimated to be $345 million IFC is considering an investment, in the form of a combination of debt and equity or quasi-equity, in the range of $75-90 million. |
| Location of project and description of site |
| The Project is a greenfield site located nearby Chatrasala village, Gulbarga district in Karnataka, on the border of Andhra Pradesh some 130 kilometers west of the city of Hyderabad. |
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| Anticipated development impact of the project |
| The project will have a strong development impact. First, it will increase the availability of competitively priced cement, a critical basic input needed for the local infrastructure and housing sectors. Second, it will create 590 direct and over 1500 indirect jobs around the region both during the construction and operational stages. Third, it will improve the road and railway infrastructure in the project area. Finally, it has been designed to incorporate best available technologies and practices in a number of areas thereby minimizing water and energy consumption per ton of cement produced. |
| IFC's expected development contribution |
1. Assist an international industry player to partner with a local company to enter a high growth cement market in an IDA country.
2. Provide long-term financing adapted to the capital intensity and cyclicality of the industry at a time when such financing is not readily available.
3. Contribute in the adoption of best industry practices in terms of energy efficiency and control of emissions.
4. Work with the project company to apply best practice environmental and social standards |
| Environmental and social issues - Category A |
This is a Category A project according IFC’s Procedure for Environmental and Social Review of Projects. Please refer to the Environmental and Social Review Summary (ESRS) and the associated Environmental and Social Action Plan.
Key issues associated with this project involve: land acquisition for the plant site; access to and supply of raw materials (limestone, water); construction and operation of access routes (road and rail); integrated environmental, health and safety (EHS) management of the construction and operation of multiple project components (e.g. cement production, power plant, quarries and associated facilities); management of the construction labor force; waste discharges and emissions – especially the significant carbon dioxide emissions generated by clinker production and captive thermal power generation; impacts of project construction and operations on surrounding communities.
Further details on the potential environmental and social impacts of the project, corresponding mitigation measures and guidance on how and where information about the project can be obtained are provided in the IFC Environmental & Social Review Summary and Environmental &Social Action Plan. |
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| For inquiries about the project, contact: |
All inquiries and comments may be directed to:
Mr. Eric Calvet - Email:e.calvet@vicat.fr
or
Mr. Subba Rao MV – Email: subbaraomv@sagarcements.in
Vicat Sagar Cement Private Limited
8-2-472/B/2, Road No.1, Banjara Hills
Hyderabad – 500 034, Andhra Pradesh, India
Tel: +91 40 23351571
Fax:+91 40 23356573 |
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| For inquiries and comments about IFC, contact: |
General IFC Inquiries
IFC Corporate Relations
2121 Pennsylvania Avenue, NW
Washington DC 20433
Telephone: 202-473-3800
Fax: 202-974-4384
E Mail: Webmaster |
| Local access of project documentation |
Vicat Sagar will disclose this ESRS and ESAP locally at the Village Panchayath Offices in Chatrasala and in Kharjikhed as well as at its corporate office in Hyderabad at the following address:
Vicat Sagar Cement Private Limited
8-2-472/B/2, Road No.1, Banjara Hills
Hyderabad – 500 034, Andhra Pradesh, India |
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