Baku Coca-Cola Bottlers II

completed

Summary Of Project Information (SPI)Project NameAzerbaijan - Baku Coca-Cola Bottlers IIRegionEuropeSectorProject No008631Projected Board DateDecember 18, 1997Company NameBaku Coca-Cola Bottlers Ltd. (BCCB)Technical Partner and/or Major Shareholders Efes Investments, part of the Anadolu Group (Turkey).Project Cost Including proposed IFC investment US$21.2 million, including an IFC “A” Loan of up to US$7.0 million.Location of project and Description of site The project is located in Khirdalan, an industrial zone near Baku, the capital of Azerbaijan. The project site is a land area of 4.2 hectares situated near a good and plentiful water supply and a reliable power source, with easy access to the greater Baku market. The available area provides adequate space for production and warehouse facilities (8,200 m2), administrative offices (1,500 m2), water storage and parking, plus room for future growth for the addition of the second line. Description of Company and Purpose of Project Baku Coca-Cola Bottlers Ltd. (BCCB) was established in Azerbaijan in July 1994 to import and distribute Coca-Cola products in the greater Baku market. In March 1996, the Company undertook construction of a greenfield Coca-Cola bottling facility in Baku. The plant was completed in August, 1996 and commercial production began in September. The state-of-the-art bottling plant has a nominal annual capacity of 60 million liters, using modern polyethylene terephthalate (PET) bottle production, generating employment for 270 people. IFC provided a long-term loan of US$3.5 million for the greenfield project, and has approved an equity investment of US$2.3 million equivalent in the Company. Long-term financing for projects outside the oil sector from local and foreign private sources is generally unavailable in Azerbaijan. Growth in soft drink consumption and BCCB’s performance have exceeded both the Company’s and IFC’s expectations: actual 1997 YTD sales volumes are more than double projections. The Company has established a successful direct distribution program in greater Baku and has launched a regional dealer network. In order to avoid capacity restrictions in the near future, and to better supply growing demand from its regional dealer network, the Company has proposed an expansion project for: (i) upgrading bottling capacity by addition of a second PET bottling line; (ii) expanding warehouse capacity at its Baku facility, and; (iii) improvements in regional distribution infrastructure. Environmental Category and Issues This is an environmental review category B project. Environmental, occupational health and safety issues issues associated with this project include water supply, liquid effluents, air emissions, 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 sponsor has implemented plans to address these issues and has demonstrated that the expansion project will comply with all relevant Government of Azerbaijan, City of Baku, and World Bank environmental policies and guidelines. To address the issue of possible contamination of the project site from its prior use for oil extraction, the company has conducted a Environmental Site Assessment of the property, and has obtained indemnification for prior contamination from the City of Baku. The is available from the Public Information Center.Date SPI sent to PIC November 18, 1997“This Summary of Project Information is prepared and distributed to the public in advance of consideration of the proposed transaction by the Corporation’s Board of Directors. It is provided for the purpose of enhancing the transparency of IFC’s activities and should not be construed as presuming the outcome of IFC Board consideration.”For Additional Information contact: Corporate Relations Unit -telephone: (202) 473-7711facsimile: (202) 974-4384Environmental documents for this project are available at http://www.ifc.org and from the World Bank InfoShop (http://www.worldbank.org/html/pic/aboutinfo.html).