Baku Coca-Cola Bottlers II

completed

November 18, 1997Environmental Review Summary (ERS)Project Name AZERBAIJAN - BAKU COCA-COLA BOTTLERS IIRegion EuropeSector Food and BeveragesProject No. 008631 November 18, 19971. Baku Coca-Cola Bottlers (BCCB) recently completed, with IFC assistance, a new soft drink bottling facility in Baku for production of beverages under license from Coca-Cola Corporation. BCCB is a joint venture between Efes Investments of Turkey, which operates four Coca-Cola bottling companies in Central Asia, and Ilcin Limited, a trading company in Azerbaijan. The plant currently has an annual capacity of 60 million liters, using one line operating on three shifts. This proposed second investment is to install an additional PET bottling line with an initial production capacity of 80 million liters per year. The new line will expand overall production capacity to 140 million liters per year, and streamline production by reducing the number of changeovers between glass and PET bottles on the existing line. The 4.2 ha site was initially selected to provide adequate space for the existing production/warehouse facilities, administrative offices, water storage and parking, plus room for a building addition to house the second line.2. Water is obtained from the local spring fed potable water system. Cola concentrate is purchased from Coca-Cola Corporation and shipped by rail from St. Petersburg or Moscow. Sugar is bought from a broker and also shipped to the site by rail. Most packaging materials are imported. Single-use PET bottles are produced using in-house blow molding equipment; a second blow molder will be installed to provide sufficient capacity for the expansion. Recyclable glass bottles are purchased from an outside supplier and are returned to the facility for cleaning and reuse.3. This is a category B project according to IFC''s environmental review procedure because specific 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 information submitted by the project sponsor, and the technical appraisal and site review completed by IFC’s Technical and Environment Department staff. The following potential environmental, health and safety impacts of the project were analyzed:· water supply;· liquid effluent treatment;· air emissions from steam boilers;· solid waste disposal;· potential contamination of the site from present or past uses;· use of CFCs in refrigeration systems; and· workplace noise and safety.The information provided by BCCB about how each of these potential impacts will be addressed in the development of the proposed project is summarized in the paragraphs that follow.4. Availability of suitable water resources was a key consideration in the choice of the plant site. The source of production water is municipality-supplied water from the Sorlar spring located about 150 km from Baku; an extension of the municipal distribution pipeline was constructed by BCCB as part of the original project. Capacity of the system is sufficient to supply the expanded plant. BCCB disinfects and treats the water prior to use using a procedure approved by Coca-Cola Corporation.5. Bottlewashing rinse water which contains caustic soda is treated to recover and recycle the caustic soda. Other sanitation systems using caustic soda are closed circuit, with the solution being discharged to the sewage system only once per week. BCCB discharges process waste water and sewage into the municipal sewer system. The municipality is, with the assistance of the World Bank, constructing a new waste water treatment plant to replace existing facilities; this plant is expected to be completed by mid-1998.6. The plant is connected to the local power grid; a diesel powered emergency generator provides backup for key plant systems. Steam and hot water for the bottling process are provided by two diesel fuel fired boilers, each with a steam output of 5,000 kg/hr. Diesel fuel is stored in underground tanks with secondary containment. Both the generator and boilers are designed to current European environmental standards; test information provided for one boiler indicates compliance with World Bank guidelines.7. The addition of the second bottling line will moderately increase solid waste volumes, mainly of scrap packaging materials and domestic trash. Solid waste from the plant is collected by the municipality and sorted; non-recyclable wastes are disposed of at designated landfill sites in the Baku area.8. The project site is located in an area that has previously been used for oil field development. Based on the results of a Phase I Environmental Site Assessment and other available information, an area free from surface contamination was selected for siting the initial plant. BCCB confirms that the building addition site for the second line will be in a location not contaminated from past land uses. BCCB has obtained indemnification for past site contamination from the City Government of Baku for the use of the property.9. BCCB confirms that air cooling as well as refrigeration systems used in the initial plant and the expansion will utilize ammonia (NH3), therefore, all cooling and refrigeration equipment will be CFC free.10. As for the initial plant, the second line will be designed to comply with all fire, health and other safety precautions as required by local regulations. Fire alarms and fire fighting equipment are built into the project, and procedures are in place for fire and medical emergencies. Use of personal protective equipment is mandatory in relevant workshops. Training programs will be updated to include the new line. Proper procedures are in place for the handling, storage and consumption of potentially hazardous materials associated with plant processes.11. Based on its review of available information regarding potential environmental impacts and proposed mitigation measures, IFC concludes that Baku Coca-Cola Bottlers proposed expansion project will meet World Bank environmental, health and safety policies and guidelines and host country requirements.12. IFC will monitor ongoing compliance with World Bank environmental, health and safety policies and guidelines during the lifetime of the project by evaluating reports submitted annually to IFC by Baku Coca-Cola Bottlers and by conducting periodic supervision.L:\WPEU\KITT\BAKU2.ERSNovember 18, 1997 8:09 AM