10527 - International Luggage Manufacturing Company

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Environmental Review Summary

Project Number

10527

Company Name

International Luggage Manufacturing Company

Date ERS Disclosed

Oct 5, 2000

Country

Jordan

Region

Middle East

Environmental Category

B - Limited

Status

Completed

Previous Events

Approved : Nov 30, 2000
Signed : Dec 10, 2000
Invested : Dec 20, 2000

Sector

Shoes and Leather Products

Industry

other

Department

Regional Industry MAS MCT

Project Description

The Project is to expand the operations of Boscan Jordan Group (BJG), a Jordanian manufacturer of soft-side luggage products. BJG''s existing facilities, International Luggage Manufacturing Company (ILMC), consist of 20 production lines for soft-sided luggage. The new investment will add 40 additional production lines in two new companies, ILMC II and ILMC III, to be located adjacent to the existing operation. The Project is located in the Al-Hassan industrial park in Irbid, Jordan''s third largest city, in the north of the country. The Company''s products are manufactured and sold under brand names by major US retail chains. The total cost of the expansion project is expected to be US$31 million. The proposed IFC investment is a US$12 million loan and a US$1.0 million equity investment in BJG.

The project is expected to have a significant development impact, creating two and half thousand jobs in Jordan, at least half of which are for women. The Jordanian workforce will be trained to take over the specialized operations in the manufacturing process which will initially be carried out by an qualified expatriate workforce. This process, together with training initiatives to be undertaken with local colleges will lead to a significant skill transfer and promote the development of new skill based light manufacturing industry in Irbid. The Boscan Group is rapidly expanding its investments in Jordan including in garment manufacturing, textiles and IT.

Environmental and Social

The sponsor has presented plans to address these impacts to ensure that the proposed project will, upon implementation of the specific measures agreed, comply with applicable host country laws and regulations and World Bank/IFC requirements. The information about how these potential impacts will be addressed by the sponsor/project is summarized in the paragraphs that follow.

The site for the expansion is part of the Al-Hassan Industrial Park, which has been zoned for industrial use by the Government of Jordan. The land for the Park was purchased at fair market value from private owners. No economic displacement or resettlement took place. The management company for the Park is responsible for the maintenance of infrastructure such as sewage and other drain lines, electricity sub-stations and access roads. Solid waste disposal is the responsibility of the individual companies with compliance monitored by the estate management company. The Project''s solid waste comprises domestic waste, packaging wastes and textile offcuts. Disposal is at the muncipal landfill. There are no significant air or liquid emissions.

The building design provides adequate working space, light and ventilation for workers. Fire and life safety arrangements have been verified by IFC as compliant to Jordanian and IFC requirements. This includes firewater supply, firefighting equipment, emergency signage and evacuation routes.

The primary activity will be textile cutting and stitching. No textile dyeing or screen printing will take place on site. Site activities will not generate process air emissions or process wastewater streams. Within the current operation, there is a small workshop area for the shaping of aluminium frames for certain luggage lines. As part of the expansion, this will be relocated to a dedicated area with sound insulation. Workers in this area will be provided with appropriate personal protective equipment such as ear defenders.

The Project is located within an established industrial park and will have no adverse social impact. The Project will employ about 2,300 people. Jordan has relatively few skilled textile workers and for the first two to three years, Boscan will use an on-the-job training approach where one third of staff will be highly skilled expatriate employees who will train new Jordanian employees. At the end of this period, the majority of employees will be Jordanian nationals. Boscan will be an equal opportunity employer, though the nature of the work assures that women will represent at least half of the workforce. Boscon’s reputation for workplace practices is good. Jordan has and enforces strict hiring and workplace practices. Boscan''s labor and workplace practices are also subject to regular inspection by its main US customers.

Conclusion & Monitoring

This Environmental Review Summary (ERS) is prepared and distributed in advance of the IFC Board of Directors' consideration of the proposed transaction. Its purpose is to enhance the transparency of IFC’s activities, and this document should not be construed as presuming the outcome of the Board of Director’s decision. Any documentation that is attached to this ERS has been prepared by the project sponsor or in conjunction with the project sponsor and authorization has been given for public release. IFC has reviewed this documentation and considers that it is of adequate quality to be released to the public but does not endorse the content. The following ERS is disclosed in accordance with IFC's Disclosure of Information Policy that went into effect September 1998.

The map is for illustrative purposes and does not imply the expression of any opinion on the part of the World Bank, concerning the legal status of any country or territory or concerning the delimitation of frontiers or boundaries. Country borders or names do not necessarily reflect the World Bank Group's official position. In some cases, available project location information is limited to the country of the project's activities. Locations are approximate.

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