10600 - Swedwood Tichvin

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Environmental Review Summary

Project Number

10600

Company Name

IKEA INDASTRI TIKHVIN, OOO

Date ERS Disclosed

Jul 2, 2001

Country

Russian Federation

Region

Europe

Environmental Category

B - Limited

Status

Completed

Previous Events

Approved : Nov 1, 2001
Signed : Mar 1, 2002
Invested : Apr 25, 2002

Sector

Furniture and Related Products

Industry

other

Department

Regional Industry MAS LAC & EUR

Project Description

The project consists of the construction and operation of a greenfield, vertically integrated furniture component operation with an annual capacity for wood harvesting of up to 250,000 m3, sawmilling of up to 150,000 m3, and furniture component production of up to 24,000 m3. The facilities will be located in Tichvin, Russia, in the eastern part of the Leningrad Oblast, and the project will be sponsored by Swedwood, IKEA''s furniture production subsidiary. The plant''s production, to be made of both birch and pine, and eventually also spruce, will be designed specifically to fit into IKEA''s global supply structure, and to complement IKEA''s existing network of Russian suppliers. In addition, IFC and Swedwood are considering the implementation of a technical assistance (TA) program to improve the sustainability of the company''s operations, including training of local forest operators that would eventually supply the plant. The Project represents the initial step in Swedwood''s long-term strategy to create its first integrated production base for furniture manufacturing in Russia.

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 plant will be sited on a 24 ha industrial property approximately 2 km from Tichvin. The site was previously planned for a generating station, but construction was never completed. There is no evidence of any soil contamination from previous activities. No people live on the site and there has been no resettlement associated with this development. There are no residential areas adjacent to the site and no environmentally-sensitive areas in the vicinity.

As a major international company in the forest products sector, Swedwood is very conscious of the need for sustainable forest management, and as a subsidiary of IKEA adheres to IKEA''s requirements in this regard. For its wood supply, Swedwood is negotiating forest leases with the local forest management agencies (leschozes); leases for approximately 66,000 ha have been agreed and the company is continuing to negotiate for an additional 40,000 ha. Harvesting will be done using Scandinavian methods to avoid damage to the forest, and subsequent reforestation is also the responsibility of the leaseholder. Swedwood intends, together with regional and local forest authorities, to work for certification for sustainable forest management for its forest leases. Swedwood will put in place procedures for tracking of wood supplies to ensure that wood is not coming from any protected areas, nor from plantations established by clearing critical natural forest.

There will be no significant process wastewater produced by the sawmill and glueboard plant. Sanitary wastes are discharged to the municipal wastewater treatment system. Swedwood will install a boiler, fueled with waste wood, for production of heat for drying. The boiler will be fitted with appropriate combustion controls and a multi-cyclone to achieve compliance with World Bank Group air emission guidelines. Wood waste will be used as fuel for the boiler, sawdust will be used to make briquettes, and other wood chips will be sold to other wood processing industries. Water-based glues will be used.

Swedwood places a high value on workplace health and safety and applies IKEA''s "4-step model" for improvement. This includes detailed policies and procedures dealing with environmental responsibility, workplace health and safety and labor conditions which all of their supplier organizations must meet. The sawmill and glueboard plant will be operated to meet IKEA''s international standards, including limitations on noise, protection of machinery and maintenance of good air quality. IKEA''s health and safety requirements include preparation of emergency response plans, use of personal protective equipment and training.

Fire and life safety protection includes fire alarm systems, hydrants, extinguishing equipment, spark detection systems (in the dust collection system) and emergency response plans and training.

Conclusion & Monitoring

IFC will evaluate the project''s compliance with the applicable environmental and social requirements during the lifetime of the project by reviewing the annual monitoring reports (AMRs) prepared for the project covering ongoing performance of project-specific environmental, health and safety and social activities, as reflected in the results of periodic and quantitative sampling and measuring programs. Periodic site supervision visits will also be conducted.

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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