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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 | 20625 |
| Project name | Balrampur Chini Mills Ltd. |
| Country | India |
| Sector | Food & Beverages |
| Department | Agribusiness |
| Company name | Balrampur Chini Mills Ltd. |
| Environmental category | B |
| Date SPI disclosed | April 14, 2003 |
| Projected board date | May 15, 2003 |
| Status | Active |
| Previous Events | Invested: June 26, 2003
Signed: May 29, 2003
Approved: May 23, 2003 |
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| Description of company and purpose of project |
Balrampur Chini Mills Limited (BCML or the company) is the largest and the most financially viable sugar producer in India. A public limited company, the ‘Saraogi’ family holds about 47% of its equity capital. The company with its three sugar manufacturing units in East Uttar Pradesh has an aggregate capacity of 25,000 tonnes crushing per day [TCD] Balrampur’s existing mills account for 2.25% of annual Indian sugar production. BCML wants to capitalize on its strengths of excellent management, strong operational and financial capabilities to expand its sugar capacity and diversify its revenue streams through the production of value added products related to sugar production. These include cogeneration and dedicated biomass power plants, ethyl alcohol, and bio-compost fertilizer. The proposed project includes an integrated, Greenfield 4,000 tonnes cane/day [TCD] sugar mill, an associated bagasse-fired 20 megawatts (MW) co-generation plant providing steam and power for the mill’s use and selling 15.45 MW of electric power to the Uttar Pradesh grid. The final element of the project includes construction of new 60 kilo litre / day [ KLPD ] ethanol distillery and an associated biomass fertilizer manufacturing unit, which will employ sugar and ethanol manufacturing waste at the existing 8000 TCD Babhnan mill.
The purpose of this project is to build:
- a 4,000 tonnes cane per day (tcd) greenfield sugar mill and associated 20MW bagasse fired cogeneration power plant at Haidergarh in the state of Uttar Pradesh, India and
- a 60 kilolitres per day ethanol distillery (for blending with gasoline) and associated biomass fertilizer plant at the company’s existing sugar mill at Babhnan also in the state of Uttar Pradesh, India. |
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| Project sponsor and major shareholders of project company |
| The project sponsor is Balrampur Chini Mills Limited which is a public company traded on the major stock exchanges in India. Its major shareholders are the Saraogi family which hold about 47% of its shares. |
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| Total project cost and proposed IFC investment |
| The total project cost is estimated at $44 million of which IFC proposes to provide a Rupee loan equivalent of $15 million for its own account. |
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| Location of project and description of site |
The greenfield sugar mill is to be located in Haidergarh in the district of Barabanki in the state of Uttar Pradesh, India. It is a rural site with small holding farms in the area. It is located near the main roadway to facilitate the transportation of sugar cane to the mill and sugar and its by-products from the mill.
The proposed ethanol distillery will be located near the company’s Babhnan sugar mill which is also in a rural area. It will benefit from the existing infrastructure associated with the mill. |
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| Project Development Impact and IFC's Role |
This project is expected to have a high development impact by achieving the following results:
- Help a mid-sized company remain competitive and prepare it to take advantage of changes in the Indian sugar industry. The project will support an experienced and successful operator in its drive to become a leading actor in a very fluid Indian sugar sector. The project will also allow the company to take full advantage of newly opened opportunities in the power and the ethanol sectors.
- Create strong backward linkages with farmers. The project will support a large number of individual farmers who will gain access to a reliable client for their production. At the Haidergarh location it will help farmers grow sugar which is one of the most profitable crops and should facilitate an increase in farmer incomes. The company enjoys considerable goodwill among sugar cane farmers due to the technical assistance provided and the reliability of its payments.
IFC will provide a much needed long term funds to the company as well provide input into enhancing the company’s occupational health and safety program. IFC will also work with the company to increase its farmer extension program through the use of existing trust funds. |
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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 that can be avoided or mitigated by adhering to generally recognized performance standards, guidelines or design criteria. The review of this project consisted of physical inspections of the new mill and cogeneration facilities under construction at Haidergarh; the proposed site for the distillery at Babhnan; and a technical evaluation of Balrampur’s other operating mills at Balrampur and Tulsipur. The environmental assessment of the project included review of technical and environmental/social information submitted by the project sponsor along with project-specific environmental assessments prepared for the Uttar Pradesh Pollution Control Board (UPPCB). The UPPCB grants authority to construct and permission to operate permits for the facilities and this control ensures that adequately designed projects are constructed within the state. IFC concludes that the proposed project will meet the applicable World Bank/IFC environment and social policies and the environmental, health and safety guidelines upon successful implementation of the agreed mitigation measures.
To view the environmental documents for this project, click here |
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| Location of environmental documents in locally affected community |
The location of the environmental documents will be made available at the following sites.
(i) Haidergarh Location:
- Post Office: P.O. Pokhra
Tehsil, Haidergargh, District Barabanki
- Bank: Bank of India,
Nandengarh, Account No CD 72
- Temple: Co Laxmi Narayan, Pokhra
- Site: Pokhra, Haidergarh, Barabanki, Uttar Pradesh, India, 227 301
- Website: www.chini.com
(ii) Babhnan Location:
Post Office: Dist Gonda, P.O. Babhn
Pin 271 313
Bank: State Bank of India
P.O. Babhnan, District Gonda, Pin 271 313
Temple: Swami Narayan Mandir
P.O. Chapia, District Gonda, Uttar Pradesh
Website: www.chini.com |
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| To contact the project company, please write to: |
Kishor Shah, Chief Financial Officer,
Balrampur Chini Mills Limited,
FMC Fortuna 2nd Floor
234/3A, A.J.C. Bose Road
Kolkata – 700 020
India
Telephone: 91 33 2247 4749
Fax: 91 33 2240 3083 |
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