Fertilizantes Fosfatados S.A.

completed

Summary Of Project Information (SPI)Project NameBrazil: FOSFERTIL S.A.     RegionLatin America and the CaribbeanSectorFertilizersProject No008168Projected Board DateMay 15, 1998Company NameFertilizantes Fosfatados S.A. (Fosfertil)Technical Partner and/or Major Shareholders Fosfertil is majority owned by Fertifos S.A., a holding company controlled by a group of six Brazilian bulk fertilizer blenders. These include IAP (23%), Soloricco(23%), Manah (23%), Fertibras (13%), Fertiza (10%), Takenaka (6%) and others (2%).Project Cost Including proposed IFC investment The total project cost is US$200 million. IFC’s proposed investment is US$80 million in the form of an A Loan of US$20 million and a B Loan of US$60 million.Location of project and Description of site The project will increase capacities for phosphoric and sulfuric acid as well as production for TSP and MAP at the company plant in Uberaba (Minas Gerais State). The new ammonium nitrate prilling plant will be located at Cubatão (São Paulo State), a major industrial center located 12 km from Brazil’s largest port, Santos. Fosfertil will also expand its marine terminal at Santos in response to increased cargo volume.Description of Company and Purpose of Project Fosfertil is Brazil’s largest producer of phosphate and nitrogen fertilizers with markets shares of 34% and 17%, respectively. It operates five production sites in South-Central Brazil which produce fertilizers, and various chemicals (e.g. nitric acid, technical urea, methanol, etc.). Manufacturing sites include Uberaba; Piaçagüera/Cubatão and Araucaria (state of Parána). Mining sites are located at Catalão (state of Goias), Tapira and Patos de Minas both in Minas Gerais. The company also owns a marine terminal at Santos. Fosfertil is one of the most integrated fertilizer producers in Brazil and is listed on the São Paulo and Rio Stock Exchanges. The project will improve Fosfertil’s competitiveness and help it maintain its market leadership through the following actions and investments: (a) debottleneck production of MAP and TSP, two of its fastest growing products where the company has lost market share in recent years; (b) add explosive grade ammonium nitrate prills to its product slate, the demand for which is expanding in the Brazilian mining sector and offers very attractive margins; (c) streamline its logistics system and cut freight costs by 30% on average through better integration of railways transportation into its existing operations.Environmental Category and Issues This is an environmental review category B project; principal issues involve air emissions, liquid effluents, solid waste disposal, storage and materials handling, spill and fire prevention, contingency and emergency response plans, and general employee health and safety. The sponsor has presented plans to address these issues and demonstrate that the proposed project will comply with applicable governmental and World Bank requirements. A demister will control the sulfur dioxide and sulfur trioxide emissions from the sulfuric plant, which has 99.7 conversion efficiency. The air emissions from the phosphoric acid production will be controlled with a venturi system and a scrubbing tower. The liquid effluents from the processes at Cubatão and Uberaba will be treated before being discharged. The sponsor will appropriately dispose of the residues generated during the sulfur-melting step. Domestic solid residues will be disposed in a landfill approved by the local authorities. The chemical and fuel storage tanks have secondary containment. Areas with noise levels greater than 85 dBA are clearly identified and require obligatory use of personal protective equipment (PPE). Fosfertil has established strict fire and explosion safety and occupational health and safety programs complying with governmental standards and World Bank guidelines. The sponsor has a corporate environmental and safety prevention management to oversee all safety and environmental matters at all facilities. Employees are provided with and required to use appropriate PPE including breathing masks, eye protection lenses, gloves, noise protection equipment, gas detectors and appropriate clothing to reduce exposure to hazardous chemicals. Employees are trained with regard to plant safety rules, accident prevention, hazards of the workplace, spill prevention, fire and explosion safety, emergency response, and use of PPE.The Environmental Review Summary will be available from the Public Information Center on March 30, 1998.Host country location of environmental documentsFertilizantes Fosfatados S.A., Estrada Eng Plinio de Queiroz, s/n, Caixa Postal 35, 11570-900 Cubatão, SP, BrazilDate SPI sent to PIC March 30, 1998For 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).