HIKAL III

active

Established in 1988, Hikal Limited (“Hikal” or the “Company” - https://www.hikal.com/) undertakes custom manufacturing of key intermediates and Active Pharmaceutical Ingredients (“APIs”) for pharmaceuticals, animal health as well as crop protection companies globally. Hikal has six manufacturing facilities in India including two pharmaceutical facilities in Jigani (State of Karnataka), one pharmaceutical facility and one crop protection facility in Panoli (State of Gujarat), one crop protection facility in Mahad (State of Maharashtra), one crop protection fatuity in Taloja (Stete of Maharashtra). In addition, there is a research and development (R&D) facility in Pune (State of Maharashtra). IFC is proposing an investment up to $50 million in Hikal for a multi-year CAPEX program entailing several projects (the “Project”). The CAPEX plan proposals are spread across various business segments and production facilities to be implemented over the next 2-3 years as follows; i) pharmaceuticals (capacity expansion of existing products, expansion of manufacturing facilities for human health APIs and for animal health APIs at the Jigani facility); ii) crop protection (capacity expansion for existing products, expansion of the manufacturing facility at Mahad); iii) expansion of the R&D facility in Pune (pilot plant, laboratory and kilo laboratory; and iv) effluent treatment plant, solvent recovery unit and utility upgradation (e.g., at facilities where Zero Liquid Discharge system is not yet installed as described in the PS3 section below.) At the pharmaceutical manufacturing facilities, Hikal has an API product pipeline across therapeutic areas related to diabetes, anti-thrombotics, hypertension, anti-inflammation and analgesic for human health. At crop protection manufacturing facilities, the product range of active ingredients and intermediates includes algaecides, insecticides, fungicides, biocides and others.This is IFC’s third investment in Hikal. IFC made two direct investments in Hikal in July 2008 and March 2013 previously which are no longer active.It may be noted that in January 2022 and subsequent to the original disclosure of this Environmental and Social Review Summary (ESRS) document, as per several media reports, IFC understands that 6 people died and 23 were hospitalized in the city of Surat, state of Gujarat in India, due to exposure to certain toxic fumes. Hikal has since clarified that the tanker involved in transporting the material in question was not the same tanker that left the company’s premises. IFC understands that this matter is under investigation and this ESRS may be further updated once the Company updates all stakeholders on the status. Meanwhile, in line with the requirements of the IFC Performance Standards, an Environmental and Social Action Plan (ESAP) has been updated and agreed upon as enclosed.