SEF Alex - Socatrag

completed

SUMMARY OF PROJECT INFORMATION (SPI)Project Name : Guinea-Alex Socatrag Region : Sub-Saharan AfricaSector : Vehicle MaintenanceProject No : 009051Projected Board Date : June 21, 1998Company Name : Alex SocatragTechnical Partner/ Major Shareholders : Shareholders of Alex Socatrag include 144 former employees of Compagnie des Bauxites de Guinée (CBG)associated in the Socatrag Cooperative (49% shareholding), and Alex Pneu & Mécanique, a Canadian company with large experience in the automotive industry (51% shareholding).  A P & M offer car and truck service through 10 outlets in the Montreal Region and operates a tire and parts distribution operation with a turnover of 14 million dollars.  They started operations in 1980 and in 1996 were certified under the ISO 9002 system.  A P & M wishes to expand into overseas operations and is confident that their management expertise and experience in the industry will enable them to successfully ensure that the project is run on a profitable basis.Project Cost Including Proposed IFC Investment :  Total project cost is estimated at US$2.6 million equivalent.  IFC has been asked to provide a loan of  US$1.3 million equivalent representing 50% of total project cost.Location of Project and Description of Site :  The maintenance garage workshops are located in Kamsar and Sangaredi, at about 300 km from Conakry.   Total size of the land on which the two garage are established is respectively 2,850 and 1,250 square meters.Description of the Company and Purpose of the Project : Alex Socatrag is a joint venture between Socatrag, cooperative of 144 former employees of CBG, and A P & M, the Canadian partner  The objective of this project is a spin-off of vehicle maintenance activities, which were previously directly operated by CBG and will now be transferred to the joint venture.  The project will modernize and expand the maintenance garage operation in order to provide increased efficiency and better support to CBG’s mining operations as well as develop new business outside of CBG to diversify revenue sources in the medium run.  A five year maintenance agreement contract has been signed by Alex Socatrag and CBG spelling out the mutual conditions and benefits under the agreement.  Among the most important expectations of CBG under the agreement is an increase in quality and greater availability of vehicles and equipment which should attain a 95% availability ratio.  Under the project, Alex Socatrag will acquire existing machinery and equipment as well as purchase new equipment.  The project will also finance the acquisition of vehicles and working capital requirements. IFC Role : IFC has played an instrumental role in putting this deal together by providing crucial support to the new company Alex -Socatrag in order for it to secure financing which will allow for the acquisition and expansion of the garage.  IFC is equally contributing to the creation of an efficiently and privately run small scale enterprise which will strengthen the local private sector in an econmomically important region of Guinea and establish an importantant example of networking between large and small enterprises.  IFC’s presence provides some comfort to the Canadian partner who brings the technical know how and experience which are important to the success of the operation. In supporting Alex-Socatrag, IFC participates in a project which will have strong example value for similar future activities in the country and in Africa.  Environmental Category  and Issues : 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 the appraisal of technical and environmental information submitted by the project sponsor and completed by IFC’s Environment Department staff. The key environmental, health and safety issues considered in this project include: Site location and land use; Air emissions; Liquid effluents treatment, disposal or recycling (including sewage, used motor oils and motor fluids); Fuel and other chemicals storage(including secondary containment and leak detection); Hazardous and solid waste management and disposal; Noise emissions; workplace health and safety; and Employee training and fire protection.The company has verified that past activities have not created contamination of the underlying aquifer; no known soil contamination has been found at the garages.  No emission of air pollutants is associated with the project.  Ambient noise level is not expected to exceed acceptable noise for this type of activity.  New operational practices will improve existing on site environmental protection.  A waste management plan has been devised for liquid, solid and hazardous waste collection and disposal. No Ozone Depleting Substances (e.g., CFCs) will be used in air conditionning maintenance, air conditioning, or fire-fighting equipment on the premises. An Environmental Management Plan will be submitted in line with World Bank guidelines. It will ensure adequate environmental monitoring, health and safety measures, fire safety and emergency response plan in terms of accidental spills. Workers training programs will be designed to increase the level of expertise in  the different operations at the company. The COOP Alex/Socatrag business plan includes the basis for a training programme of the garage workshops. The training programme will include comprehensive health and safety precautions and procedures regarding storage, handling and use of harmful materials. The programme will also include environmental awareness and training for accidental spill and hazardous waste disposal management.  Fire safety at the company is carried out in compliance with local and World Bank regulations and guidelines. Fire extinguishers will be located at strategic place. Fire drills including, use of fire fighting equipment and evacuation plans are part of Alex Socotrag fire safety program. Training and inspection of fire equipment is provided by the CBG fire department.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 Alex Socotrag and by conducting periodic supervisions.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 the Government of Guinée Conakry requirements, and World Bank policies on  environmental, health and safety guidelines.The Environmental Review Summary is available from the Infoshop.Date SPI sent to Infoshop : May 21, 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) 473-7711Facsimile :  (202) 974-4384 \\StreetTalk\Public@Network@IFC\PIC\gns09051.docMay 21, 1998 10:00 AMEnvironmental 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).