NEMAK

completed

- 3 - June 12, 1995Environmental Review Summary (ERS)Project Name Mexico-Nemak S.A.Region Latin America and CaribbeanSector Motor Vehicles and ComponentsProject No 0048381. Nemak s.a. (Nemak) is a major manufacturer of automobile parts and supplies both domestic and international clients with aluminum cylinder heads for automobile engines. In order to better satisfy market demands and improve quality control mechanisms, Nemak is embarking on the expansion and modernization of its industrial plant in Garcia (West of Monterey), Nuevo Leon, 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:· air emissions;· water supply;· liquid effluent treatment and discharge;· solid waste recycling;· spill prevention and control;· fire protection and emergency response; and· employee health and safety.The information provided about how these potential impacts would be addressed in the Nemak project is summarized in the paragraphs that follow.3. The Nemak project, which will expand the production capacity of the Nemak plant currently in operation, will be constructed in an adjacent lot occupying a surface area of 224,060 m2. The site is within an industrial park located at safe distance from the nearest population center. Two 60 ton natural gas furnaces are to be used to melt and prepare the aluminum alloy. An additional six 5-7 ton furnaces are to be used to maintain the alloy in proper conditions for subsequent poring into the molds. These furnaces are heated by electrical coils. The approximate rate of natural gas consumption will be 40,000 m3 per month. Natural gas is supplied by PEMEX via local pipeline network. The air emissions will be in compliance with both local requirements and World Bank guidelines.4. The Nemak project employs small water volumes in its manufacturing process. Cooling water is recycled in a closed system. There are no major water bodies in the area, thus any water will be supplied via municipal system or tank trucks.5. Low volumes of liquid effluents will be generated during the manufacturing process. This process water will be treated at the Nemak’s wastewater treatment facility to comply with local requirements and World Bank guidelines. Treated wastewater will be used for irrigation within the site.6. Solid and industrial waste will be in the form of aluminum chips and refuse. These are to be collected and recycled as raw material. Silica sand, used in the making of cylinder cores, is also to be recycled. A small amount of hazardous waste will be generated. This waste is in the form of empty chemical drums, used grease and oil, and contaminated cleaning utensils resulting from the maintenance of plant machinery and equipment. This material will be temporarily stored on-site in a designated warehouse for subsequent disposal at government approved disposal facilities.7. Triethylamine, a toxic organic compound, is used in the aluminum cylinder head manufacturing process. Proper handling of this product is considered high priority due to its environmental, health and safety concern. Approximately 8 to 10 tons of triethylamine is expected to be consumed per month under normal manufacturing conditions. A contingency plan, including an emergency evacuation plan, has been prepared to address potential spills and related emergencies. Spills will be contained within the property boundaries.8. As indicated in paragraph 7, Nemak has developed a comprehensive contingency plan to address triethylamine spills, fires, and other emergencies associated with the process. Employees are trained in health and safety issues, environmental protection issues and in their job functions. The manufacturing process involves high temperatures and proper fire fighting equipment, fire alarms and training in fire fighting is foreseen.9. Nemak complies with Mexican labor laws and regulations and ensures that each worker is thoroughly trained in health and safety issues, environmental protection, and in the particular task he or she is to be assigned. The Company has yet to develop a formal environmental policy, but such is forthcoming. Nemak has personnel in charge of conducting environmental monitoring and coordinating environmental compliance activities.10. 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 Nemak and by conducting periodic supervision.11. Based on its review of available information regarding potential environmental impacts and proposed mitigation measures, IFC concludes that Nemak, S.A.’s proposed project is designed to meet World Bank environmental, health and safety policies and guidelines, and host country requirements.