Unicell Paper Mills (PTY) Ltd.

completed

Summary Of Project Information (SPI)Project NameSouth Africa-Unicell Paper Mills (Pty) Limited     RegionSub-Saharan AfricaSectorProject No008571Projected Board DateDecember 4, 1997Company NameUnicell Paper Mills (Pty) LimitedTechnical Partner and/or Major Shareholders The major shareholder is Cosco Ltd, an investment holding company controlled by the Sharma Group. Cosco Ltd, which is the sponsor for the project, will have an 85% equity stake in the project. The Sharma Group has a long history in the paper manufacturing business, and owns paper mills and converting plants in Botswana, South Africa, Swaziland, United Arab Emirates and Zambia. The Group has a talented pool of managers and technical personnel well versed in paper manufacturing and marketing.Project Cost Including proposed IFC investment Project Cost is estimated at US$47.3 million; the proposed IFC investment consists of a Senior (A and B) loans of US$27.0 million, a Shareholder loan of US$3 miilion and a nominal equity investment of US$45,000.Location of project and Description of site The project will be located in Germiston area in the Gauteng province of South Africa.      Description of Company and Purpose of Project The project is to install and operate an integrated paper mill, consisting of deinked pulp (DIP) mill, tissue paper mill and converting lines. The DIP mill will havethe capacity to produce 120 tons per day (40,000 tpa) of deinked pulp from waste paper. Fifty percent of the output will be fed into the downstream tissue facility to produce 60 tons per day (20,000 tpa) of tissue paper and converted tissue products. The remaining deinked pulp (20,000 tpa), in the form of wetlap, will be sold to Swazi Paper Mills, an existing client of IFC, and a part of the Sharma Group.       IFC Role & Developmental Impact: The project offers an opportunity for IFC to assist in the advancement of a regional group, and in the fostering of economic integration in the SADC area. Besides itself providing financing, IFC will play an important catalytic role by arranging a B-Loan. The project will have a strong developmental impact. It will contribute positively to the environment through its use of recycled waste paper. The labor-intensive means employed in collecting waste paper, is particularly important given South Africa’s unemployment rate of 30%, which is actually much higher in the black community. Employment creation is a major priority of the government policy. The project will create employment both directly and indirectly for some 340 people. Training programs will be instituted to reskill and train local staff; this will include appropriate overseas training. Environmental Category and Issues This is a category B project according to IFC’s environmental review procedure. The key environmental and health and safety issues include air emissions, effluent treatment and discharge, solid waste and sludge management and disposal, hazardous materials storage and handling, and workplace health and safety. The only significant air emissions generated are particulates, sulfur oxides, and nitrogen oxides from the coal-fired steam boiler, which will be appropriately controlled to meet World Bank standards for these units. Process effluents will be pretreated and discharged to the municipal sewerage system. Solid wastes and effluent pretreatment plant sludges will be disposed by a third party contractor in an approved off-site landfill. Hazardous chemicals will be segregated and stored in areas with adequate spill containment. Adequate fire protection features and procedures will be provided, and the installation will comply with World Bank health and safety requirements. IFC will monitor the sponsor’s ongoing compliance with World Bank policies, and environmental, health and safety guidelines during the life of the project by evaluating monitoring reports submitted annually to IFC.          The is from the Public Information Center.Date SPI sent to PIC      October 24, 1997“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) 974-4384Environmental 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).