| Galaxy Chemicals |
| 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 | 29246 |
| Company name | Galaxy Chemicals |
| Country |
|
| Sector1 | All Other Chemical Product |
| Environmental category | B |
| Department | Reg Manufact, Agri & Services, EMENA |
| Status | Active |
|
| Date SPI disclosed | February 24, 2010 |
| Projected board date | April 16, 2010 |
| Previous Events | Invested: September 24, 2010
Signed: August 27, 2010
Approved: July 28, 2010 |
|
| Overview |
Sponsor/Cost/Location |
Development Impact |
Contacts |
Attachments |
| Project description |
| The proposed Project involves the construction of a greenfield plant in Egypt to produce chemicals, primarily for export to large, international companies that manufacture home & personal care products in MENA, Europe & the Americas. A majority of Galaxy Egypt’s sales will go to multinationals, many of which are currently supplied from the Sponsor’s existing operations in India. |
|
| Project sponsor and major shareholders of project company |
The Project Sponsor is Galaxy Surfactants Limited (“Galaxy” or the “Company”), an Indian unlisted public company founded in 1986 that produces chemicals used by manufacturers of home & personal care (“H&PC”) products including shampoos, toothpastes, liquid soaps etc. It is a prominent & established supplier in the Indian market & exports to over 90 countries. Growth is expected in the BRIC and other developing countries as improved standards of living provide opportunity for increased demand for H&PC products. Galaxy’s top customers include multinational producers of home and personal care products.
The Company’s promoters and promoter group collectively hold approximately 78% of equity shares of Galaxy. |
| Total project cost and amount and nature of IFC's investment |
| The total Project cost is estimated to be about $30 million. The proposed IFC investment is a $12MM A Loan. |
| IFC investment as approved by Board |
| 12 million (USD) |
| Product Line | IFC Investment (million USD) |
| Risk Management | |
| Guarantee | |
| Loan | 12 |
| Equity | |
* These investment figures are indicative |
| Location of project and description of site |
| The Project will be located in the Suez Public Free Zone, an industrial area near the Red Sea, approximately 125 kilometers from Port Said, Egypt. |
|
| Anticipated development impact of the project |
| The Project is expected to have the following development impacts: (i) establishment of the first such state-of-the-art manufacturing facility of this type in Egypt, helping diversify the economy away from its dependence on natural resources and tourism, (ii) local employment of approximately 70 direct jobs during operations and about 1,000 labourers during construction, (iii) training opportunities for about 40-45 Egyptian locals who will be sent to India for approximately 4 months, (iv) export earnings from export of manufactured products and (v) social spending in the local community. |
| IFC's expected development contribution |
| IFC’s key role/additionality in this transaction include: (i) facilitating a South-South investment opportunity for a client venturing outside its home country with production capacity for the first time, (ii) technical and strategic guidance based on IFCs global knowledge and expertise in financing greenfield projects in Egypt and (iii) long term financing (not available to the Company in Egypt) which is critical for this capital intensive industry. |
| Environmental and social issues - Category B |
| The key environmental and social issues for this project include water saving, wastewater treatment, and water reuse; operational safety and emergency response; and energy saving and energy efficiency. Galaxy has presented plans to address these impacts to ensure that the proposed project will, upon implementation of the specific agreed measures, comply with the environmental and social requirements - the host country laws and regulations and the IFC Environment and Social Performance Standards and the World Bank Group (WBG) environmental, health and safety guidelines. The information about how these potential impacts will be addressed by Galaxy is summarized in the Environmental and Social Review Summary (ESRS), which is disclosed together with this document. |
|
| For inquiries about the project, contact: |
Mr. Uday Kamat / Vaijanath Kulkarni,
Galaxy Surfactants Limited
C-49/2, TTC Industrial Area, Pawne, Navi Mumbai 400703 India
Tel:+ 91 22 39135500 / 65134444
Fax: +91 22 2768 6523
e-mail: uday.kamat@galaxysurfactants.com, vaijanath.kulkarni@galaxysurfactants.com. |
|
| 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 |
Mr. Amgad Mokhtar
Galaxy Chemicals (Egypt) S.A.E
Plot No. 9, Block M, the Public Free Zone,
Attaka-Suez, Egypt
Tel:+ 20 10 5827715 |
|
|
|