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

completed

- 2 - International Finance CorporationA Member of the World Bank GroupInternational Finance CorporationA Member of the World Bank GroupEnvironmental Review Summary (ERS)Project Name Mexico-Forja de Monterrey, S.A. de C.VRegion Latin America and CaribbeanSector Automotive ComponentsProject No. 008184 1. Forja de Monterrey (Forja) was established in 1996 by Grupo Quimmco, a Monterrey based industrial group with interests primarily in the automotive sector. The proposed project involves the establishment of a heavy forge plant to produce large forged automotive components, specifically I-beam front axles for heavy trucks (Class 5-8) and crankshafts for large diesel engines (8 liters and above). The plant will have a design capacity of 24,300 metric tons of forged products per year, equivalent to 126,000 I-beams and 190,000 crankshafts. The plant will be highly automated, allowing for greater process efficiency and quality at a lower cost than existing producers. The new facility will be located in an industrial area in 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:· site location;· air emissions;· wastewater treatment and recycling;· solid waste management;· ISO 14,000 certification; and· occupational health and safety.Information provided on how these potential impacts would be addressed in the Forja project is summarized in the following paragraphs.3. The sites for the Forja plant is located within an industrial zone, and is surrounded by major roads, railroads and other industries. The locations status as industrial area is part of the master plan for Monterey.4. Air emissions at the Forja plant will be limited. The plant will receive billets from other steel producers and no smelting will take place. The heating of billets before the forging process is done by electrical induction and practical no air emissions are resulting. A normalization oven used after the forging process will use natural gas as fuel and will be equipped with low NOx burners, hereby emissions from this process will also be kept at a minimum. Necessary protection (painting) of the final products will take place in closed cabinets with emission control.5. Forja will implement a wastewater recycling program and practically all process and domestic wastewater from the facility will be recycled or used for irrigation of green areas within the plant site.6. Solid waste is mainly scales and other types of inert solid waste. This waste will be handled by locally authorized waste management companies.7. Occupational health standard will follow normal international standards. Compared to other heavy metal handling plants the Forja plant is expected to have low noise levels. The relative low noise levels are caused by the use of forging presses in stead of hammer forging. Employees working will still be required to use hearing protection if they are working in areas were noise levels exceeds 85 dBA.8. Forja believes that ISO 14,000 will become a marketing incentive in the future. Therefore, Forja is planning to apply for this environmental certification as soon as it becomes available in Mexico from local based certification offices.9. 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 Forja de Monterrey and by conducting periodic supervision.10. Based on its review of available information regarding potential environmental impacts and proposed mitigation measures, IFC concludes that Forja de Monterrey’s proposed project will meet World Bank environmental, health and safety policies and guidelines, and host country requirements.P:\CTEEU\FORJA.ERSJuly 29, 1997 5:25 PM