Forja de Monterrey, S.A. de C.V.

completed

Summary Of Project Information (SPI)Project NameMexico-Forja de Monterrey, S.A. de C.V. (“Forja”)     RegionLatin America and CaribbeanSectorProject No008184Projected Board DateOctober 3, 1997Company NameForja de Monterrey, S.A. de C.V.Technical Partner and/or Major Shareholders The project sponsor is Grupo Quimmco, S.A. de C.V. (“Quimmco”), a comparatively small and young industrial group based in Monterrey, Mexico. Quimmco has interests in the automotive, chemical and construction industries. Automotive industry operations account for over 90% of the group’s sales, and Quimmco presently operates two foundries in partnership with Teksid (Fiat).Project Cost Including proposed IFC investment Approximately US$50 million, including US$12 million IFC A Loan, a US$12 million IFC B Loan, and US$3 million of IFC equity.Location of project and Description of site The proposed forge will be located in Ciudad Escobedo, near Monterrey in northern Mexico. The site is located adjacent to another of Quimmco’s automotive operations in an industrial area of the town.Description of Company and Purpose of Project Forja will focus on the production of large forged automotive components, specifically the production of I-beam front axles for heavy trucks and crankshafts for large diesel engines, but adaptable also to other heavy forgings. The plant will have a design capacity of 24,300 metric tons of forged products per year. The plant will be highly automated, allowing for greater process efficiency and quality at a lower cost than existing producers. North American forge capacity has declined continuosly over the past two decades, as obsolete, small scale in-house presses have proven unable to compete against lower-cost specialized forging shops located predominantly overseas. In particular, the NAFTA market today outsources the majority of of its class 5-8 truck front axle I-beams and crankshafts from suppliers in India, Hungary, Brazil, and Japan. The sponsors believe that a Mexican supply source for high quality forgings would be a new strategic platform to service the North American truck and heavy machinery industry, able to compete on cost, quality and delivery time.Environmental Category and Issues This is a category B Project according to IFC’s environmental review procedure procedure. Environmental issues associated wih this project include: air emissions; liquid effluents; and occupational health and safety. Air emissions will be limited by use of electrical induction heating and natural gas. Liquid effluents will be recycled for irrigation. Solid waste is limited to mainly inert substances which will be handled by authorized companies.The is available from the Public Information Center. Date SPI sent to PIC August 21, 1997For 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).