Lafarge Surma Cement

completed

Summary Of Project Information (SPI)Project NameBangladesh-Lafarge Surma Cement LimitedRegionAsiaSectorProject No008035Projected Board DateJune 11, 1998Company NameLafarge Surma Cement Limited (Lafarge Surma)Technical Partner and/or Major Shareholders Lafarge of France will own at least 51% of Lafarge Surma. The remaining equity will be provided by the Islam group of Bangladesh, IFC, other multilateral and bilateral development institutions and, if possible, the public in Bangladesh. Lafarge’s technical centre in France, Centre Technique Inter-Unites (CTI), is responsible for the design and engineering of the project. Lafarge will be responsible for the management of the project. Project Cost Including Proposed IFC Investment $240 million project cost. IFC proposes an A Loan of $35 million, a B Loan of up to $10 million and equity of $10 million.Location of Project and Description of Site An integrated, dry process cement plant will be built on the north-west bank of the Surma River at Chhatak, Sylhet district, in the far north-east corner of Bangladesh very close to the border with the Indian state of Meghalaya. There are no cement grade deposits of limestone in Bangladesh but it is in plentiful supply in Meghalaya. Thus a limestone quarrying and crushing operation will be established in Meghalaya to serve the cement plant and the two centres of operations will be connected by an overhead belt conveyor.Description of Company and Purpose of Project Lafarge is the second largest cement producer in the world with over 75 operating plants in 45 countries. Lafarge will bring to bear state-of-the-art technology, operational know-how and superior management skills. Domestic competition in the cement industry in Bangladesh will be intensified. The project reflects a pioneering role for Lafarge and its backers in Bangladesh. It will demonstrate to other world-class foreign companies and local businessmen that large viable projects can be undertaken in Bangladesh and can be financed on acceptable terms. Permanent jobs will be created for some 282 local employees in Bangladesh and Meghalaya who will receive training from Lafarge. Initially, seven expatriates will be permanently based in the country. The planned investment of US$20 million in Meghalaya is significant for that small Indian state and will enable it to add value to a bountiful natural resource that otherwise has little economic value due to the state’s own tiny market and remoteness from the rest of India. IFC’s presence will provide comfort to a major foreign direct investor and IFC will take a prominent role in the group of multilateral and bilateral development finance institutions which are willing to support the project. IFC will also be actively involved in helping to negotiate and structure the cross-border trade aspects of the project. Environmental Category and Issues Category A. Environmental, occupational health and safety issues which were reviewed for this project included:- air emissions;- wastewater handling and treatment; - solid waste and hazardous materials management;- site selection for all components of the project; - compensation, relocation and resettlement of residents, occupants and land users;- quarry operation and reclamation; - fire protection and emergency response; and - general worker occupational health and safety. The sponsor has prepared environmental assessments (EAs) for both the quarry site in India and the plant site in Bangladesh which address the relevant issues and describe the mitigative measures to be adopted to reduce or eliminate any negative impacts of this development. As part of the environmental and social review process, the sponsor has undertaken the necessary public consultation and public disclosure. The plant site in Bangladesh is currently farmed by approximately 75 persons, and there are an additional 110 persons living in 5 dwellings in the proposed jetty area. The sponsor has prepared a detailed Resettlement Action Plan (RAP) which fully addresses all of the resettlement issues and ensures that the relocation process is carried out in full compliance with the applicable World Bank Group policies and procedures.The are are are are are from the Public Information Center.Host country location of environmental documentsRais Boarding, West Bazar, Chhatak, Sunamgonj District, Bangladesh, and Office of Headman, Nongtrai and Wahadadar, Shella Bazar in Meghalaya, IndiaDate SPI sent to InfoShop May 6, 1998“This Summary of Project Information is prepared and distributed to the public in advance of consideration of the proposed transaction by the Corporation’s Board of Directors. It is provided for the purpose of enhancing the transparency of IFC’s activities and should not be construed as presuming the outcome of IFC Board consideration.”For Additional Information contact: Corporate Relations Unit Telephone: (202) 473-3800Fax: (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).