Cifunsa S.A. de C.V.

completed

- 2 - March 28, 2000INTERNATIONAL FINANCE CORPORATIONA Member of the World Bank GroupINTERNATIONAL FINANCE CORPORATIONA Member of the World Bank Group March 28, 2000 Mexico: Cifunsa S.A. de C.V. Environmental Review Summary1. Cifunsa S.A. de C.V. (Cifunsa) is a major manufacturer of cast iron automobile parts and pipe fittings, supplying both domestic and international clients. In order to better satisfy market demands and improve quality control mechanisms, Cifunsa is embarking on the expansion and modernization of its industrial plants in Saltillo (west of Monterrey), Mexico.2. 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 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 this project were analyzed:· air emissions;· dust in ambient air;· liquid effluent and water recovery;· solid waste management;· molding sand recovery; and· occupational health and safety.The information provided about how these potential impacts would be addressed in the Cifunsa project is summarized in the paragraphs that follow:3. The Cifunsa project will expand the production capacity of the Cifunsa Plant III, improve production conditions at Plant II and ultimately result in shut down of Plant I, Cifunsa''s oldest production plant. Plant I''s production portfolio will be transferred to Plant III according to need. The sites for the three Cifunsa plants are all located within an industrial zone, stretching from the center of Saltillo towards the outskirts of the city. Plant I is located in the industrial site closest to the city center, whereas Plant II and Plant III are located side by side in proper distance from the city center. 4. Air emissions at the three Cifunsa facilities are related to the following: operation of Cupola ovens for iron melting; preparation of casting forms; casting operations; shake-out operations; and finishing operations. The coke used by Cifunsa in the melting process is of high quality and contains low amounts of sulfur. Therefore, air emissions from all operations are related to dust and particulate emissions. The dust emissions and dust in the working environment is the main environmental problem at all three Cifunsa facilities. The dust problems will be solved by the optimization of existing air extraction systems, and installation of additional air extraction systems and filter capacity. Cifunsa has started this upgrade by relocating existing air ducts and installing new filter systems. This work will continue throughout the investment period to bring Plant II and Plant III in full compliance with World Bank guidelines for dust emissions and dust in ambient air. No major environmental investments will be made at Plant I as it is scheduled for shut down by the end of 1996, when the investment program at Plants II and III is completed.5. To further limit the ambient dust levels, all transport roads within Plants II and III sites will be paved with asphalt or concrete.6. Cifunsa is working on a wastewater concept for the recovery of water used in the operations. Cifunsa expects to be able to eliminate liquid effluents from the operations of Plants II and III by completion of this program.7. Solid waste is mainly molding sand, dust from filters and other types of inert solid waste. All this waste is deposited in a landfill located outside the city in an area not subject to major water flows during periods of rain. At the deposit, a contractor is sorting the waste to recover any leftover metal.8. To limit the amount of molding sand to be imported, and the amount of used molding sand to be deposited at the landfill, a recovery calciner is being installed as part of the upgrading project. The recovery system will have a potential of reclaiming up to 90% of the molding sand from Plants II and III. Given that molding sand is the main solid waste being land filled, this is an important environmental component in the project.9. Occupational health standard in the Plants II and III will be significantly improved by reducing dust in ambient air as described above. Specific occupational safety problems related to operation of pipe fitting finishing machinery will be solved by inclusion of new automatic/guarded machinery or improvement of operating standards.10. IFC will ensure ongoing compliance with World Bank environmental, health and safety policies and guidelines during the life of the project by evaluating monitoring reports submitted annually to IFC by Cifunsa and by conducting periodic supervision.11. Based on its review of available information regarding potential environmental impacts and proposed mitigation measures, IFC concludes that Cifunsa’s proposed project is designed to meet World Bank environmental, health and safety policies and guidelines, and host country requirements.niels\mexico\gissa\ers