10894 - Tecnofil S.A.

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Environmental Review Summary

Project Number

10894

Company Name

Tecnofil S.A.

Date ERS Disclosed

May 14, 2001

Country

Peru

Region

Latin America and the Caribbean

Environmental Category

B - Limited

Status

Completed

Previous Events

Approved : Jun 29, 2001
Signed : Dec 13, 2001
Invested : Dec 17, 2001

Sector

Other Miscellaneous Fabricated Metal Products (Including Non-Wood Housing Products, Tanks, Cutlery, Kitchen Utensils and Handtools, etc.)

Industry

other

Department

Regional Industry MAS LAC & EUR

Project Description

Tecnofil S.A. is one of Peru’s most important producers of copper and copper alloy semi-finished and finished products (electrical bars, connection flats, wire, hardware ''nuts and bolts''-type of products, solder, copper sulfate for the mining and fertilizer industries). The company started operations in 1975 and in the past four years has significantly increased its size in terms of assets and modernized its commercial focus. The company would like to obtain IFC financing to fund: (i) an expansion in its production capacity; (ii) the continuation of the implementation of modern technology to their production processes; and (iii) the refinancing of short term debt.

The project will increase their production capacity by approximately 50% from around 15,000 to around 23,000 tpa. The company will switch completely to a modern "continuous casting" technology. Tecnofil needs the new technology to continue their modernization and maintain their growth pace, be able to compete internationally and comply with more demanding quality requirements from more sophisticated clients.

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.

1. Tecnofil currently operates two production facilities in the outskirts of Lima, Peru. The first one is a fabricated product plant for copper and brass. The current capacity is about 15,000 tpy depending on the product mix, which will be increased by about 50%, to 23,000 tpy. Types of products are (i) copper busbars, bars and flats for the electrical distribution industry, (ii) alloy bars (mainly copper and zinc) for the hardware business (screws, nails, rivets, etc.), (iii) copper wire for the welding of milk and food cans, (iv) wire rod and cables for electrical conductors, and (v) copper sulfate, mainly used in the mining industry as a reagent for zinc flotation. The second plant operated by Tecnofil is for the production of copper sulfate. The raw material is mainly copper cement and low-grade mine concentrates. The first step of the process is a roasting operation that makes the material amenable to acid leaching. The second step is a small-scale heap-leaching operation with sulfuric acid that brings the copper into solution as copper sulfate. The third step is a solvent-extraction unit to separate the copper in solution from the impurities, before the sulfate is concentrated and precipitated as a solid crystal. Capacity is in the order of 1,500 tpy and is limited basically by the space needed for the heap-leaching operation. The sites are not located near sensitive habitats and their acquisition did not cause resettlement or economic displacement.

2. Tecnofil''s plants receive periodic inspections by the Ministerio de Salud (DIGESA), to determine Tecnofil''s compliance with environmental and occupational health and safety regulations. Based on these inspections, a series of measures to improve Tecnofil daily activities are being implemented, including training and constant follow-ups on the employees'' knowledge of health and safety regulations.

3. Noise level at certain areas of the facilities are exceeding the norms established by the Peruvian Government. Tecnofil, through the Centro de Prevención de Riesgos del Trabajo--CEPRIT (Lima) is in the process of implementing a program called Programa de Conservación de la Función Auditiva. This program involves preventive and corrective measures to detect the frequency of illnesses related to constant exposure to high noise levels. In addition, it was recommended that employees have an annual medical check-up. Tecnofil provides its employees with personal protective equipment (PPE) when working in areas of high noise level. Training programs in the use of PPE are also provided to all Tecnofil employees.

4. Technofil plans to acquire land for the construction and installation of the new plant. The Company has identified possible sites for this facility, but has not decided which one to acquire. All of the sites being considered are zoned for industrial use and free of squatters or other occupants.

5. Tecnofil is in the process of developing a program for the analysis of air emissions in the foundry area to determine the Volatile Organic Compound (VOC''s). If the analysis reveals that permissible levels are exceeded, Tecnofil will develop a corrective action plan (CAP) to reduce the levels of VOCs. Tecnofil liquid effluents generated from the industrial processes are discharged directly to the municipal sewerage system (SEDAPAL) and are in compliance with the system''s requirements. Liquid effluents from their testing laboratory are discharged into a treatment tank and then into the SEDAPAL system, and are also in compliance with the system''s requirements. The industrial liquid effluents generated by the second plant (copper sulfate plant) are recirculated (closed system) into the process.

6. The fuel used at Tecnofil (Diesel #2) is stored in underground tanks. The tanks are inspected on a regular basis by the Ministerio de Industrias, which issues operation licenses. Tecnofil has an inventory of all waste generated at the facilities and a procedure for handling and storing hazardous materials.

7. Tecnofil has a fire prevention system in place, including a fire emergency response plan. the Company has a designated fire brigade available at all times, and regularly conducts fire training and drills. The plants are equipped with fire extinguishers and sand boxes are placed strategically throughout the facilities.

8. Tecnofil''s occupational health and safety program has been approved by the Ministerio del Trabajo. The Company''s Committee for Occupational Health and Safety oversees the implementation of training programs.

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: (i) 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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