Sao Paulo Alpargatas

completed

Summary Of Project Information (SPI)Project NameBrazil-São Paulo Alpargatas S.A. (“SPASA”)     RegionLatin America and CaribbeanSectorProject No007141Projected Board DateMay 30, 1996Company NameSão Paulo Alpargatas S.A. (“SPASA”)Technical Partner and/or Major Shareholders SPASA’s stock is owned by about 6,500 shareholders. The controlling shareholders are: Camargo Corrêa, a Brazilian construction company which holds 33.5% of the common stock, Bradesco (21.2%) and Banco Itaú (4.9%), two leading Brazilian private banks, and Previ (12.6%), the pension fund of Banco do Brasil.Project Cost Including proposed IFC investment US$116 million; IFC investment of US$50-70 million, of which US$30 million for IFC’s own account and US$20-40 million for the account of participant banks.Location of project and Description of site Five plants will be located in Brazil’s Northeast (states of Rio Grande do Norte, Paraíba and Pernambuco) and five in the South (states of Minas Gerais, São Paulo and Rio Grande do Sul).Description of Company and Purpose of Project SPASA is a Brazilian group that manufactures shoes, garments and tarpaulins. As part of an overall modernization process, SPASA is implementing a three-year investment program estimated to cost US$116 million, aimed at meeting the growing demand for shoes in Brazil, increasing productivity, installing environmental improvements and reducing fixed and variable unit costs. About half of the investment will be made in the Northeastern region of Brazil. This region has traditionally been among the country’s least developed and by financing this program, IFC will be meeting IBRD’s and Brazil Government’s objective of reducing poverty and stimulating development in this region. In addition, IFC’s financing will help SPASA remain competitive in face of increased competition (particularly from imports) and will allow the Company to provide basic goods for the population, particularly sandals, at better quality and lower cost. Without IFC’s umbrella, SPASA would not have the ability to raise the necessary long-term funds from commercial banks. Environmental Category and Issues      This is an environmental review category B project; principal issues involve air emissions, liquid effluents, spill prevention, solid wastes, fire prevention and emergency response, and employee protection from noise, dust and hazardous substances. SPASA has presented plans to address these issues and demonstrate the proposed new facilities will comply with applicable governmental and World Bank requirements. SPASA’s existing facilities generally comply with governmental regulations, but the Company has prepared, in conjunction with IFC, an Environmental Improvement Plan (EIP) for upgrading the existing facilities to meet applicable World Bank guidelines; key actions include the installation of wastewater treatment and spill prevention improvements, and provisions for supervisory and employee training, including fire prevention, emergency response, hazards recognition and use of personal protective equipment. The is available from the Public Information Center.Date SPI sent to PIC April 12, 1996For 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).