Messer Gases Dikheila Company S.A.E.

completed

Summary Of Project Information (SPI)Project NameEgypt-Industrial Gas Center     RegionCentral Asia, Middle East and North AfricaSectorProject No008006Projected Board DateMay 17, 1997Company NameMesser Gases Dikheila (MGD)Technical Partner and/or Major Shareholders The main sponsors are Messer Griesheim (MG), a German company, and Alexandria National Iron and Steel Co.(ANSDK), an Egyptian integrated steel mill, which would own respectively 45% and 35% of MGD. MG is majority owned by Hoechst AG and is one of the leading global industrial gases companies. ANSDK, an IFC client, is a profitable and internationally competitive producer of steel rebars. Project Cost Including proposed IFC investment Project Cost of US$20.3 million (including an IFC A loan of US$4 million and an equity investment of about US$1.2 million equivalent representing up to 10% of MGD’s capital)Location of project and Description of site MGD will build and operate an air-separation plant and a cylinder filling station in El-Dikheila, 15 kms west of Alexandria. It would also invest in distribution equipment and road tankers.      Description of Company and Purpose of Project The project consists of setting up MGD, which would have a capacity of 2,000 Nm3/hr of oxygen, 4,300 Nm3/hr of nitrogen and 70 Nm3/hr of argon. MGD would supply ANSDK and the market in proximity to the plant. Sales to ANSDK would take place under a long term supply contract and would absorb an important portion of MGD’s output. MGD’s remaining output would be sold to smaller customers in the Alexandria area benefiting from low transportation cost.      This is MG’s first industrial gas project in the Middle East. The project will contribute to expand and increase competition in the Egyptian industrial gas market which is currently dominated by a public sector company with about 40-50% market share. This is expected to result in a reduction in prices. IFC is viewed as a neutral third party between MG and ANSDK and this would be useful for the smooth running of MGD. Also, IFC intends to work closely with the sponsors to pursue a public offering of 10% of the MGD’s capital. This will not only broaden MGD’s ownership but also have a demonstration effect in Egypt as it would be the first public offering for a greenfield project.Environmental Category and Issues       This is a category B project according to IFC’s environmental review procedure. The project does not produce undesirable emissions or effluents. Environmental, occupational health and safety issues associated with this project include: hazard assessment, employee exposure to the presence of high pressure gases and heavy steel cylinders, equipment safeguarding, fire prevention and emergency response. The sponsors have presented plans to address these issues and demonstrate that the proposed project will comply with applicable governmental and World Bank requirements. Key actions include: A hazard assessment (Hazop) plan is in place at the facility, that includes the source of hazard associated with the handling of chemicals, and the circumstances and situations in which accidents are possible. The general safety at the facility will be designed according to international rules and regulations. These regulations apply not only to the design of equipment, but also to the regulations of accident prevention. The electrical equipment, pressure vessels, tanks and pipes will be grounded. Occasional rupture of pressure bearing vessels and pipes will be minimized by providing accurate design of the pressure system via safety valves. The spill of liquid gases by rupture of hoses between tanks and trucks will be prevented by “dead man protection circuits”, which stops the supply pumps immediately when the operator leaves the pump. Personnel will be trained on the job during installations and checking of equipment. A fire protection and life safety plan as required by the local fire department will be implemented. Extinguishers and other fire fighting equipment will be installed and placed according to the fire department recommendations. 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 MGD and by conducting periodic supervisions.The is from the Public Information Center.Date SPI sent to PIC March 28, 1997For Additional Information contact: Corporate Relations Unit -telephone: (202) 473-7711facsimile: (202) 676-0365Environmental 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).