Unimetco

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Unimetco Holdings (“Unimetco”, or the “company”), a Lebanese incorporated holding company, is the largest independent manufacturer and system house for polyurethane (PU) and adhesives used in construction, furniture/ beddings, automotive, footwear, and appliances in MENA region. It has a production capacity of ~100kt/ year of polyurethane resins through manufacturing facilities in the UAE, Egypt and Italy and Turkey and distribution centers in Lebanon, Algeria, and Jordan.  Unimetco utilizes environment-friendly technology to recycle PET scrap into specialty resins, which are then used in the production of PU thereby offering alternatives to hydrofluorocarbons (HCFCs) which are known to have adverse impacts on the ozone layer. The company currently has the following operations:-          Baalbaki Chemical Industries Egypt (BCI Egypt), with total area of approximately 14,000 m2 of which approximately 9,000 m2 is built, in Giza, Egypt manufactures polyester polyols and through blending produces blended polyols, which are used to produce PU (rigid foams) used for thermal insulation in refrigeration and buildings. For this operation, it recently acquired land at Plot 185, industrial zone 16th October city, facing the existing plant.  This land was previously occupied by a plant producing cement blocks.-          It also produces prepolymers which are used in microcellular foam (sport shoes, clogs, safety shoes, etc.); integral skin foam (molded pillows, arm rests, car seats, etc.); flexible packaging adhesives, etc. The PU polymerization takes place at Unimetco clients’ premises.-          A greenfield production facility in Turkey to produce the adhesive used for the lamination in flexible packaging (paper, aluminum, plastic, etc.) This new facility was built within the premises of its existing Turkish distribution company.  It became operational in the 2nd quarter of 2019.-          Distribution center on approximately 6,000 m2 site in the Mersin-Tarsus Industrial Zone in Mersin City in Turkey-          Manufacturing facility in UAE, which has the same operation as in BCI Egypt and operates as a “system house”. (“System House” implies a facility to formulate individual PU chemicals into systems that provide processing, properties and end-effects required by the PU consuming industries and is the link between chemical majors (upstream) and the PU processing industries (downstream). System houses purchase liquid chemicals from major producers and re-sell to their own customers. They act as intermediary distributors to sectors of the market that require dedicated or specialist levels of service. Their common capabilities include development, blending and marketing of liquid polyurethane systems).-          Manufacturing facility in Italy produces PU rigid foams used for thermal insulation.The proposed project includes an IFC investment of up to US$40m loan to finance Unimetco’s expansions in Egypt, Algeria, and Nigeria, in addition to the financing of the company’s permanent working capital needs.  The proceeds from IFC investment will be used for (the “project”): -          Expanding the existing production plants in Egypt (i. e., installing a new reactor, modernizing its blending operations, avoiding chemicals physical manipulation, etc.) and investing in R&D for further products development to be completed by end of 2020. In addition, it will also build a second warehouse and an extra cold room within existing premises. -          Building a logistic center in Egypt dedicated for the storage of the hazardous materials, in commercial land acquired by the company in a willing seller/willing buyer basis.  It is anticipated to be completed by the end of 2020; and-          Developing additional “system house” networks in growing markets such as Algeria and Nigeria in cooperation with local partners. These operations anticipated beginning construction on 2021 and 2022 respectively.  -          Neither the UAE nor the Italian operations are part of the scope of this project.Unimetco’s existing operations are all located in industrial zones with no presence of nearby communities.