CEMENTO DE EL SALVADOR, S.A. (CESSA)

completed

Summary Of Project Information (SPI)Project NameEL SALVADOR-Cemento de El Salvador, S.A. (CESSA)RegionLatin America and CaribbeanSectorProject No003564Projected Board DateJune 21, 1996Company NameCemento de El Salvador, S.A. (CESSA or the Company)Technical Partner and/or Major Shareholders CESSA is owned by about 450 Salvadoran investors, of which six leading business groups collectively hold more than 50% of the Company’s equity.Project Cost Including proposed IFC investment Project cost is estimated at US$103 million (of which US$83 million represents a new and modern cement line and the balance of US$20 million entails a significant modernization and environmental upgrade program of existing facilities). IFC’s total investment will be US$46 million (of which US$20 million A Loan, US$24 million B Loan and US$2 million equity subscription). Additionally, a US$3 million standby equity commitment is under negotiation.Location of project and Description of site Metapan Department, El Salvador, 120 kms Northwest of San Salvador, where CESSA’s Metapan and Maya cement plants are located.Description of Company and Purpose of Project CESSA was established in the 1940s and is now the only cement producer of El Salvador. CESSA owns and operates two cement plants in the Department of Metapan, El Salvador, with a combined effective cement production capacity of 1.1 million mty. The plants are currently operating at 90% of total production capacity. The project will: (a) expand CESSA’s cement production capacity by 706,000 mty and improve fuel efficiency; and (b) modernize and upgrade environmentally the Company’s existing facilities with additional energy savings. At project completion (1998), CESSA’s production capacity will be 1.7 million mty and would have eliminated small amounts of cement imports through 2003. IFC has or expects to play a key role in the following areas: (a) providing technical and financial project structuring assistance; (b) arranging the largest international loan syndication in the country over the past 20 years; (c) advising on environmental management; (d) inducing the first primary equity issue in the Salvadoran Stock Exchange; and (e) providing support to a key economic sector and contributing to sustainable price stability for the country.Environmental Category and Issues This is an environmental review category B project; principal issues involve air emissions, liquid effluents, spill prevention, solid wastes, and employee protection from noise and dust. The sponsor has presented plans to address these issues and demonstrate the proposed new kiln line will comply with applicable governmental and World Bank requirements. A Corrective Action Plan (CAP) has been established by CESSA, based on consulting studies and IFC recommendations, to upgrade the environmental and safety aspects of the Company’s existing facilities. The CAP will be implemented by project completion (1998); principal actions will reduce dust emissions to meet the World Bank guideline for existing plants. CESSA’s existing facilities generally comply with governmental and World Bank requirements for liquid effluents, solid wastes, and occupational health and safety; however, the CAP includes actions to strengthen these areas. The is from the Public Information Center.Host country location of environmental documentsCemento de El Salvador, S.A., 29 Ave Nte. 1127, San Salvador, El Salvador.Date SPI sent to PIC      May 10, 1996For 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).