NANJING KUMHO TIRE CO LTD

completed

- 3 - May 31, 1995INTERNATIONAL FINANCE CORPORATIONA Member of the World Bank GroupINTERNATIONAL FINANCE CORPORATIONA Member of the World Bank Group June 5, 1995Environmental Review Summary (ERS)Project Name China-Nanjing Kumho Tire Co., Ltd. (NKT)Region ChinaSector ManufacturingProject No 0046931. This project involves the establishment of a joint venture, Nanjing Kumho Tire Co., Ltd. (NKT), and construction of a new tire manufacturing plant in Xiaozhuang, north-east of Nanjing, on a 180 hectare site within an existing chemical industry complex. The plant will incorporate new equipment in its radial tire operations, for an annual capacity of 2.4 million radial tires. NKT will also produce 600,000 bias tires per year using new equipment and existing equipment relocated to the new site from the Nanjing Tire Factory bias tire facility in Nanjing. The older bias tire plant, owned by one of the joint venture partners, will be dismantled independently from this project. About 1,000 employees will be required following the plant’s completion in 1997.2. 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 appraising technical and environmental 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 the project were analyzed:· air emissions;· liquid effluents;· solid and liquid wastes;· land use and resettlement;· fire prevention and emergency response; and· employee exposure to noise, dust and hazardous materials.The information provided about how these potential impacts are addressed in the development of the proposed project is summarized in the paragraphs that follow.3. NKT will install cyclone collectors for particulate emissions removal from the two 20 ton/hr. boilers and control the emissions of SO2 by using bituminous coal with a sulfur content of less than 0.8 per cent. Dust collectors and automatic carbon conveyors, weighing and feeding systems will be employed to reduce dust emissions from carbon black mixing and curing operations. These measures are designed to reduce emissions of particulate matter, NOX and SO2 to below the World Bank guidelines of 100 mg/Nm³, 600 mg/Nm³ and 1,000 mg/Nm³, respectively. 4. Cooling water from the tire manufacturing process will be circulated in a closed loop, and require only about 20-30% makeup water to replenish losses. Process wastewater, together with domestic sewage, will be processed by an in-plant physical, chemical and biological wastewater treatment system prior to discharge to a local waterbody. This system, which will include the recycling of treated wastewater, where feasible, will meet the discharge limits of the World Bank guidelines, including pH of 6-9, BOD5 of 50 mg/l, and TSS of 60 mg/l .5. NKT will generate approximately 630 tons per year of process waste in addition to domestic wastes. Administrative procedures and quality control will minimize the quantity of waste synthetic rubber, and the automatic carbon feeding system will minimize losses of carbon black. Waste rubber, carbon and sludge will be disposed of in accordance with local regulations. Waste oil will be recycled.6. The new plant site will be located in an industrial area that was formerly farmland. Of the total land requirement of 180 hectares, approximately 40 hectares was farmed by residents who lived on the site. The sponsors have worked with the local collective to facilitate the relocation of about 100 families previously residing on the site, in accordance with governmental resettlement policies. The relocation program is based on achieving a negotiated settlement with the affected families. The negotiated resettlement agreement must then be certified by governmental authorities. If an affected party is not satisfied with a proposed agreement, provisions are available both for arbitration and court review to established fair and equitable settlements. Consistent with Chinese norms, NKT was required to provide compensation to the affected families through the Nanjing City government, which conducted the actual resettlement program. There are no unresolved disputes as a result of the relocation of residents associated with this project.7. NKT will utilize modern pollution and spill control technology as well as state of the art equipment to minimize employee exposure to noise and dust. Respiratory and hearing protection will be provided, where required, to reduce employee exposure to dust and noise. Ventilation and dust removal systems will be installed in appropriate areas of the plant. All new and rehabilitated equipment from other operations will be fitted with guards and other safety devices to provide the proper level of protection to employees.8. NKT’s Safety and Environment Department will prepare and implement an Emergency Response Plan and provide employees with a comprehensive program of environment, health and safety training prior to their placement in the workplace. NKT’s environmental management policies and program will be comparable to those used by Kumho in its other operations.9. Based on its review of available information regarding potential environmental impacts and proposed mitigation measures, IFC concludes that the proposed project is being designed to meet World Bank policies, and environmental, health and safety guidelines, and Government of China requirements.10. IFC will monitor NKT’s ongoing compliance with World Bank policies and guidelines during the life of the project by evaluating monitoring reports submitted annually to IFC by the sponsor and by conducting periodic site reviews during project supervision.