11434 - Apollo Tyres

Who We Are
Who We Are

IFC is the largest global development institution focused on the private sector in developing countries. By encouraging growth, IFC advances economic development, creates jobs and improves the lives of people.
More About Us
About IFC

Our Leadership

Development Partners
Accountability

Learn more about accountability
Annual Report

Download the Report
What We Do
What We Do

IFC advances economic development and improves the lives of people by encouraging the growth of the private sector in developing countries. We achieve this by investing in impactful projects, mobilizing other investors, and sharing expertise.
What We Do Overview
SOLUTIONS

Our products and services
OUR PRIORITIES

Climate Business

Fragile & Conflict Afflicted Situations

Gender

Mobilizing Private Capital

Sustainability
SECTORS & EXPERTISE

Agribusiness & Forestry

Creative Industries

Education

Financial Institutions

Funds

Health

Infrastructure

Manufacturing

Public-Private Partnerships

Tourism, Retail & Property

Trade & Supply Chain Finance

Venture Capital

Working Upstream
Where We Work
Where We Work

As the largest global development institution focused on the private sector, IFC operates in more than 100 countries around the globe. We apply lessons learned in one region to solve problems in another.
Overview
By Region

Africa

East Asia and Pacific

Europe

Latin America and the Caribbean

Middle East and Central Asia

South Asia
Our Impact
Our Impact

Our impact improves lives. IFC brings a clear set of advantages to the world’s most challenging markets. Including a history of innovation, a global mandate, and a determination to achieve measurable development impact.
Our Impact Overview
PRINCIPLES & MEASUREMENT

Impact Investing at IFC

Measuring and Monitoring (AIMM)

Evaluation

Sustainable Development Goals (SDGs)

Owned by 186 member countries and consistently rated AAA/Aaa. IFC aims to achieve our mission of promoting development by providing debt and equity to the private sector, through a range of benchmark and bespoke products.

For Partners

For Investors

Get in Touch

Environmental Review Summary

Project Number

11434

Company Name

APOLLO TYRES LIMITED

Date ERS Disclosed

May 24, 2002

Country

India

Region

South Asia

Environmental Category

B - Limited

Status

Completed

Previous Events

Approved : Jun 28, 2002
Signed : Dec 11, 2002
Invested : Mar 28, 2003

Sector

Automotive Tires

Industry

other

Department

Gbl Ind, Manufact, Agribus & Services

Project Description

Apollo Tyres Limited (ATL, or the company), India''s second largest tyre manufacturer by turnover, is proposing a US$51 million investment program to be implemented over two years, comprising:- (i) construction of a new Truck Radial line (US$ 30 million) at its existing plant in Baroda, India, which currently manufactures cross ply tyres for all applications and passenger car radial tyres. Some of the processes which are common to the manufacture of radials and cross ply tires will be shared with the existing facility. ATL proposes to build this capacity in a modular fashion as the current demand for truck radials is very low. The first module will have a production capacity of 400 tyres/day and is expected to start commercial production by June 2004. Continental AG of Germany will be the technology and equipment supplier; they have indicated that all of the equipment being provided are of state of the art technology and will be refurbished before shipping; (ii) Debottlenecking and balancing existing cross-ply operations (US$ 6.2million). The company plans to invest US$6.2 million over the next year to increase its capacity at Perambra plant in Cochin from 132 to 200 MT per day and at its Kalamassery plant in Cochin from 58 to 78 MT per day; (iii) Maintenance capital expenditure to upgrade and modernize (US$8.0 million); and (iv) Improving maturity profile of debt ($US 6.8 million).

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. (Further information is provided in the attached documentation.)

Environmental Planning: The development of the new radial tyre manufacturing plant at Baroda will be through expansion of the existing plant. There are no statutory permissions required for the expansion which is on an existing facility. All civil construction is also within the permissions which are already held. ATL will ensure that the design of the new facility meets World Bank General Environmental Guidelines -- in particular, for air emissions (ambient and workplace), liquid effluents, hazardous materials and waste, and ambient and workplace noise -- as well as with state Pollution Control Board standards.
Process Impacts, Design changes and Improvements:- ATL has introduced a number of process improvements in their existing plant which have resulted in direct environmental benefits:- product redesign has resulted in changes to the component formulation and a concomitant reduction in raw materials, i.e. savings of 14.3% costs on every tonne of material. Improvements to bagging and debagging areas for carbon black have also been achieved through improved housekeeping (the mixing hall has been separated from the production hall) and losses of up to 40kg/shift have now been reduced to 2 kg with a plan to achieve zero losses within 2002. A new design for paint containers at the Pune plant has led to better paint quality and reduced volatilization. The introduction of heat retention cladding at the vulcanization units at Pune plant has also led to energy savings. Trials to improve carbon black dispersion and mix quality has also led to an improvement in compound safety as well as energy reductions due to an overall temperature reduction of 6-7 degrees for the final batch mixing. Low sulphur content furnace oil (original sulphur content 2.5- 4.0 % now reduced to 0.5%) is gradually been introduced in ATL plant. Further environmental improvements should be made to some of ATL''s standard manufacturing processes e.g. improved raw material batching with automated process feed; improved mechanical forced ventilation (baghouse scrubbers are fitted in some ATL plant but not universally); regular and routine maintenance would also improve workplace air quality. Containerization of hazardous materials could also be improved to reduce point source losses in the workplace.

Health and Safety:- Union representatives, HR and safety officers meet once per month in most ATL plant. Quality circles have also been introduced which have generated useful proactive initiatives and Safety Officers conduct safety audits on a regular basis together with education and training. Two major incidents (finger loss) were recorded at the Pune plant. Following one of these accidents, the worker was found alternative employment in an area of the plant where the work was lighter in nature. Older staff are still reluctant to wear safety shoes. A workplace environmental, health and safety audit should be carried out by ATL at all their plant. The audit should cover issues such as internal ventilation requirements (air exchanges to reduce temperature and ways to reduce "steam leakage” leading to reduced temperatures), manual activities/ lifting weights, noise, lighting levels and illumination. Internal air quality should also measured with specific monitoring of Threshold Limit Values (TLV’s) for sulphur and carbon dust, solvents and formaldehyde. Noise:- Internal noise levels should be routinely checked to ascertain which activities generate noise in excess of 85dB. Ear defenders should be provided for these activities and areas where excessive noise is generated should be clearly marked. Diesel Generating sets provide back up supply for critical equipment and need to be checked for noise levels. All contractors, subcontractors and their outside agencies who are engaged in work inside ATL factory premises are required to comply with the safety instructions of the company.

Fire and Life Safety and Emergency Planning:- All ATL factories are single storey facilities with sprinkler systems present in the factory warehousing areas. ATL should provide improved emergency fire exit signing. On-site Emergency Action Plans have been prepared for ATL plant.

Utilities:- Water Supply:- At Kalamassery, the water supply is from a nearby river source 0.5 km from the plant. At Perambra water is supplied by the River Chalakudy 8.5km from the plant. Water is also provided from river sources in Maharashtra and through Maharashtra IDC. Effluent Treatment:- effluent treatment plant are present in all Apollo facilities. At Kelamassery the treatment capacity is 200,000 litres/day. The facility was designed by Envirodesign – Cochin and is new. A water purification plant is also present at Kelamassery. Sanitary effluents are in general controlled by septic tanks which appear to be emptied on a once per year basis. All ATL effluent treatment plant need to brought into full compliance with World Bank Environmental Guidelines.

Fuel:- Energy costs:- Perambra 3464 KCals/kg of production in 1998/1999 reduced by 25% to 2581 in 2001/2. Kelamassery – no energy data. At Pune, energy costs of 2619 Kcals/kg of production in 1998/99 were reduced by 23% to 2014 in 2001/2. Fuel storage:- secondary containment of large volumes of fuel oil is provided; tank integrity appears to be being checked on a regular basis, however general housekeeping needs to be improved.

Scrap:- The cost of waste as a percentage of the cost of production was reduced from 1.88% to 0.87% at Perambra between 1998 and 2002; 1.78% to 0.78% at Kelamassery. At Pune start up costs as the plant was going through its start up phase were 4.37% for the cost of waste as a percentage of the cost of production. This figure had been reduced to 1.09 % by 2001/02.

Relationship with Unions:- Currently, ATL enjoys good relations with local unions although lock-outs have occurred in the past (1999). Collective bargaining has more recently led to three and four year agreements between ATL and the unions which is dependent on certain management performance improvements including future. Various HR systems and processes are in place at ATL; these include two incentive and reward systems, performance management systems, career development and training and succession planning.

Social Responsibility:- ATL has undertaken community development pilot projects at its Baroda facility that include support for elementary schools, and community centers for staff and their families. The Company is committed to expanding these activities at Baroda and its other facilities.

Retrenchment:- Between January 1998 and March 2002, ATL reduced its blue collar workforce at three of its four manufacturing plants to rationalize and improve productivity. That workforce was reduced by 396 employees through a voluntary retirement scheme (VRS) and another 164 through natural attrition (e.g., resignation, superannuation or death). The VRS was implemented in a systematic and transparent manner and with the full knowledge of all concerned individuals. The process and procedures of the VRS are detailed in the company''s Human Resources Management policy. Compensation provided to employees taking advantage of the VRS meet, and in some cases exceeds, standards established by Indian industrial labor statutes. While ATL does not foresee significant future retrenchment in any of its facilities, it is committed to abide by the same standards of retrenchment outlined above.

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) the status of implementation of any measures contained in the Environmental and Social Action Plans and (ii)] 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.

Projects

Environmental Review Summary

Project Description

Environmental and Social

Conclusion & Monitoring

Similar Projects

Projects

Environmental Review Summary

Project Description

Environmental and Social

Environmental Category B Disclosure Requirementsy

Environmental and Social Issues

Proposed Mitigation for Environmental and Social Issues

Conclusion & Monitoring

Conclusion

Monitoring and Compliance

Press-Release

Related SPI

Similar Projects

Disclaimer