Baltic Malt Sp. z o.o.

completed

Summary Of Project Information (SPI)Project NamePoland - Baltic Malt LimitedRegionEuropeSectorProject No004928Projected Board DateJanuary 3, 1996Company NameBaltic Malt LimitedTechnical Partner and/or Major Shareholders WM is a private partnership owned by the Weissheimer/Sarx families, which started malting 130 years ago. It operates six malt plants in Germany, with total production capacity of 425,000 tons annually. WM also operates the IFC funded Albadomu malt project in Hungary which has a capacity of 65,000 tons p.a. About 50 percent of its production is exported worldwide, notably to Japan and Latin America. WM sales for 1995 are expected to exceed US$200 million. WM will own 50% of the equity, and IFC and DEG 25% each. This structure is similar to that of the Albadomu project in Hungary.Project Cost Including proposed IFC investment The US$27.5 million investment program will be financed with (i) a US$7.2 million equivalent long-term loan from DEG; (ii) a US$7.2 million equivalent long-term loan from IFC; (iii) a US$1.4 million equivalent in shareholder’s loan from WM; a(iv) US$3.5 million in short-term debt from local banks in Poland; and(v) US$8.2 million equivalent in equity from WM (50%), DEG (25%), and IFC (25%).      Location of project and Description of site The project will be located on a 3 hectare site leased from the port authority for 30 years in the port of Gdansk and thus well placed to export malt. Gdansk is at the center of a barley producing area and the project will be in a favorable position to source its raw materials. The annual requirements of 81,500 tons of barley will be procured within a distance of less than 120 kms. The malt plant will be located in the industrial part of the Gdansk port, in northern Poland. The site can be reached by sea, by rail and by road. The property has a size of 30,000 m2, with a quay line of about 80 m facing the Martwa Wisla, a branch of the Wisla, Poland’s main river. Description of Company and Purpose of Project The project addresses the existing malting capacity shortage by establishing a modern and efficient plant with significant competitive advantages vis-a-vis existing malt plants in Poland, such as modern and efficient technologies, economies of scale and proximity to raw materials. The project is a net foreign exchange earner with the combined savings and earnings of about US$30 million annually. Given the stringent specifications required for the malting process, a malsters and farmers need to establish close and durable relationships which are mutually beneficial. Working closely with the Company and becoming steady suppliers, farmers would experience noticeable benefits since malting barley is generally more profitable than other cereals, especially in the proximity of a malting plant. In addition, farmers would benefit from WM''s agriculture research efforts, which would result in the introduction of better barley varieties and farming practices. The economic rate of return for the project is estimated at 31%.Environmental Category and Issues This is a category B project according to IFC environmental review procedures. The plants is designed to meet exceedingly strict German environmental standards with regards to effluent discharge, dust emission, and noise levels. The company has confirmed that it will comply with all applicable World Bank environmental standards. The malting process uses 3 to 4 m3 of water for each ton of malt produced. Water is to be sourced from ground wells to be constructed on the site; which is situated on the banks of the River Wisla. The plant''s water off-take will have no impact on the underlying aquifer and ground water levels. After steeping the water would normally have a high biological oxygen demand (BOD) level but the use of water for cleaning the chambers means that the final BOD after water arriving at the effluent treatment plant is much lower. The treatment plant consists of settlement tanks and aerobic treatment systems. After meeting all relevant standards, the water will be discharged into the river. Effluent discharge amounts to less than 1 m3 of water per ton of malt - as moisture is lost to the atmosphere during the germination and kilning processes.     The is from the Public Information Center.Date SPI sent to PIC December 1, 1995For Additional Information contact: Corporate Relations Unit -telephone: (202) 473-7711facsimile: (202) 676-0365Environmental 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).