24649 - Safal Investments (Mauritius) Ltd

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Environmental & Social Review Summary

Project Number

24649

Company Name

SAFAL INVESTMENTS (MAURITIUS) LIMITED

Date ESRS Disclosed

Feb 27, 2007

Country

Africa Region

Region

Africa

Last Updated Date

May 10, 2025

Environmental Category

B - Limited

Status

Active

Previous Events

Approved : May 10, 2007
Signed : Jun 27, 2007
Invested : Jan 24, 2011

Sector

Other Steel Products (Including Wire, Metal Sheets etc.)

Industry

Manufacturing

Department

Gbl Ind, Manufact, Agribus & Services

Project Description

Safal Investments Mauritius Limited (Safal) is a holding company owning three steel roofing manufacturing subsidiaries and eight African distribution subsidiaries (Safal Group). Safal’s flagship subsidiary, Mabati Rolling Mills Ltd (MRM) is an existing IFC client. In 2000, IFC assisted Mabati in funding for a $30 million, 100,000 tons per annum (tpa) galvanizing line. This current project entails increasing the Group’s consolidated coated steel capacity by 240,000 tpa. The project will facilitate the expansion of two existing manufacturing operations in Kenya and Tanzania and establish a third greenfield operation in Cato Ridge (Durban), South Africa. The project will also increase Safal Group’s working capital. The Group’s expansion will establish new markets in South Africa particularly for low cost, longer lasting aluminum-zinc-coated steel roofing sheets; and, meet demands in currently under-served markets in East and Southern Africa.

Overview of IFC's Scope of Review

Existing MRM operations in Mombasa, Kenya, are an active IFC investment in supervision. These operations are routinely monitored and annual reports are evaluated carefully for compliance and potential issues of concern. IFC conducted field appraisal visits to the three existing operations in Mombasa and Nairobi, Kenya and Dar Es Salam, Tanzania. IFC conducted interviews with the Safal investment program project manager, the Chief Operations Officer and with the general managers of each existing installation. A variety of self audit data reports on emissions prepared by a third party were examined. In addition the appraisal team reviewed client-furnished long-range planning documentation including, Safal Investments Group Investment Plan 2006-2012, to elucidate supplemental information about existing operations and the details of the current investment program (Phase I) as well as further investments planned for the future (Phase II). IFC engaged in detailed discussions with Safal’s South African consultant selected to prepare the scoping study and environmental impact assessment for the proposed Greenfield operation that will be constructed in Cato Ridge (Durban, South Africa).

E & S Project Categorization and Applicable Standard

Based upon IFC''s review of this client''s environmental and social assessment information, physical visits to existing and planned new operations and the current project definition, the following Performance Standards are deemed applicable as of the date of this ESRS. Changing circumstances and project definitions may, in the offing, engender applicability of additional Performance Standards. This eventuality will be examined as part of IFC project supervision; and, further assessment and mitigation measures will be required as deemed appropriate.

- PS 1: Social and Environmental Assessment and Management Systems,
- PS 2: Labor and Working Conditions,
- PS 3: Pollution Prevention and Abatement, and
- PS 4: Community Health, Safety and Security.

This Category B project has limited specific environmental and social impacts that can be avoided or mitigated by adhering to generally recognized performance standards, guidelines, and design criteria. The Sponsor’s subsidiary companies purchase steel coils manufactured internationally and reprocesses them into a variety of coated and galvanized roofing sheets and building cladding products. Steel preparation steps such as pickling, which previously generated significant volumes of wastewater, have been integrated with acid recycling plants that recycle 99% of acid and produce a byproduct sold to the coatings industry. The operations produce limited air emissions from cold steel rolling and utilization of fuels for heating and drying operations. Virtually all solid waste consists of metals used in manufacturing and these valuable materials are sold to recycling companies. The main subsidiary company has a mature environmental management program and occupational health and safety program with internationally recognized certifications. Existing operations are engaged in continuous improvements to reduce waste and energy consumption. The planned South African Greenfield plant will be a state of the art operation.

Environmental and Social Mitigation Measures

The Sponsor’s subsidiaries have presented plans to address potential impacts to ensure that the proposed project will upon implementation of the specific agreed measures, comply with the environmental and social requirements, host country laws and regulations and World Bank/IFC environment and social performance standards and applicable environmental, health and safety guidelines. 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 attached documentation.

- Social and Environmental Assessment and Management Systems:

Safal''s Mabati Rolling Mills (MRM) operation in Mariakani (Mombasa) and color coating operations in Nairobi, Kenya developed and implemented a management system that is utilized for environmental affairs and quality management in its operations. The management system is certified to ISO 9001-2000 and the current certificate is valid until June 2009. The operation is also certified to ISO 14001-2004 and this certificate is valid until July 2009. The management system incorporates a strong link to Kaizen, which is a method that stresses empowering people with tools and a methodology for uncovering improvement opportunities and making change. Kaizen''s focus is to eliminate waste or non value adding activity. The management system is being extended to ALAF operations in Dar Es Salaam, Tanzania. Safal currently conducts self audits of its existing operations. These audit reports are certified by Bureau Veritas the certifying agency for the management system. These reports are submitted to IFC annually. The Group’s proposed Greenfield operation to be constructed in Cato Ridge (Durban), South Africa, is being evaluated in an Environmental Impact Assessment study. Indicated corrective actions and mitigation measures will be identified as part of the study and will be implemented through Safal’s existing management system that will be extended to new facility operations.

- Labor and Working Conditions:

The client has a Human Resources policy that is standard for all Safal companies. The policy clearly defines the conditions of work and provides full transparency for all employees with regard to rights under national labor and employment law, wages and benefits. The policy is made available to employees at the time of employment. Occupational health and safety programs are mature. The Mariakani installation was awarded a National Occupational Health and Safety Award in October 2006. For each Safal manufacturing operation there is a core health and safety committee which is provided with supplemental training each year by an external party. Members of the committee are responsible for training employees initially and on a continuing basis. New employees are given a 40 hour occupational health and safety training course. Internal training of two hours each fortnight is provided for all employees during which operations-specific subjects are addressed including, for example, use of PPE, emergency evacuation and response, and first aid. Additionally, annual occupational health and safety audits are performed for each facility by an external third party. Statistics are routinely collected and monitored to ensure that unsafe conditions are identified and eliminated.

- Pollution Prevention and Abatement:

The Mariakani installation was awarded a National Cleaner Production Award in Innovation and Creativity in October 2006. Currently MRM Mombasa has the only pickling operation among the existing operations. A new pickling and acid regeneration line will be installed in the proposed green-field operation in Cato Ridge (Durban), South Africa. Raw materials for all Safal products consist of hot rolled steel coils (HRC) that are purchased internationally and are generally available in thickness ranging from 0.6-3.2 mm. HRC steel processes produce a thin surface coating of iron oxide, which is referred to as scale. Pickling or application of a hot solution of acid to dissolve the iron oxide is required to produce a silvery white steel surface suitable for cold rolling and roofing manufacturing activities. The Mombasa pickling operation is equipped with an Acid Regeneration Plant (ARP), which is a closed process operated in concert with the pickling line that eliminates generation of wastewater effluent. Formerly, pickling generated iron chloride and acidic rinse water that had to be neutralized and the process produced significant volumes of treated effluent along with iron hydroxide sludge. The ARP process entails roasting spent acid in a gas-fired reactor in which iron chloride is combined with water to form hydrochloric acid vapor and iron oxide. Acid vapors are dissolved in rinse water from the pickling line to form regenerated acid that is reused in pickling. Iron oxide is collected as a dry powder in a sealed pneumatic conveyor system. Iron oxide is bagged and sold for mixing with cement, manufacture of coatings such as red oxide primer, and other applications. The ARP recovers ~99% of acid and consumption of fresh acid is reduced from ~24 kg/ton to ~1 kg/ton of steel pickled.

After pickling steel coils are coated with tallow based oil to prevent development of scale and deterioration of the steel surface. These rolls are then processed in Safal''s cold rolling operations situated in Mombasa and Dar Es Salam; and, in future, in Cato Ridge, South Africa. Cold rolling produces coils of varying lengths of thin sheet steel with thickness of ~0.2 mm or less. Thin sheet coils are coated with zinc (galvanized) in both Mombasa and Dar Es Salam or with aluminum-zinc (AZ) solutions in Mombasa. AZ coating imparts a useful life ~6 times longer than galvanized sheet. Cold rolled metal coated coils are shipped to Nairobi for color coating, profiling and sales. Subsequently, galvanized, AZ-coated and color coated sheets are profiled or shaped into specific roofing or cladding products and then distributed.

ARP facilities installed at Mombasa and to be installed at the new Cato Ridge (Durban) plant have eliminated liquid effluents from pickling operations. Limited liquid cooling water waste is treated on site and utilized for facility landscaping. Tallow based oils that are utilized to protect HRCs after pickling are dissolved in the coolant during cold rolling. Subsequently, scum and oils are segregated in wastewater operations and the solids are incinerated in facilities built for the purpose. Air emissions are monitored and in compliance with IFC guideline limits. As part of the attached Environmental Action Plan (EAP) Safal will expand the range of air emissions parameters to include particulate monitoring from cold pressing operations. A new incinerator is being installed at Dar Es Salaam to appropriately manage destruction of scum and oils generated during cold rolling. Air emissions from other operations are monitored and are in compliance with IFC guideline limits. Scrap steel and other solid wastes including zinc dross are accumulated for recycling and sale to third parties.

Greenhouse gas emissions calculations, which are attributable predominantly to the consumption of electric grid power and progressively limited fossil fuels (e.g. LPG, furnace oil and diesel) for heating and boilers, show that the Mariakani (Mombasa), Kenya, operation produces ~19,000 tons/year of CO2 equivalents and the ALAF operations in Tanzania produce produces ~18,000 tons/year. Projected greenhouse gas emissions for the Greenfield facility in Cato Ridge, South Africa, are ~23,000 tons/year. As none of these operations produces more than 100,000 tons of CO2 equivalents/year, no specific ameliorative action is required. However, Safal’s current phase I investment program and planned phase II investments are aimed at continuous reduction of energy requirements, replacement of furnace oil with gas, switching technologies to avoid energy consumption and future installations of highly energy efficient equipment. All of these activities contribute to the reduction of GHG production. Pesticides are not used in any aspect of Safal operations.

- Community Health, Safety and Security:

Safal''s Mariakani (Mombasa) operation is the single facility not situated in an industrial park or in an industrial zone. At Mombasa there is an active community engagement program and regular meetings take place to ensure that the community is informed of activities at the facility. Impacts from site operations are minimal and with the ARP in operation, there are no liquid effluents discharged from the site. Limited liquid waste is treated on site and utilized for facility landscaping. All scum collected from cold rolling operations is collected for destruction in an on-site incinerator that complies with guideline emission limits. In the other operations there is a less well defined community in that the operations are situated in industrial parks. Safal will utilize the model developed for Kenya and apply it in Tanzania. In South Africa community engagement and disclosure is mandatory as part of the ESIA process. The company currently contracts security forces from external service providers for all facilities except in Dar Es Salaam. Safal''s management structure for supervision of security services entails nomination of a middle manager responsible for security. A security officer and additional employees are responsible for supervising the security contractor. Only the police and the army in Kenya and Tanzania are authorized to carry and to use weapons thus security forces are unarmed. South African operations will be required to develop a terms of reference for contract security services.

Stakeholder Engagement

The MRM operation in Kenya is the single facility not situated in an industrial park or zone. There is an active community engagement program and regular meetings are held to ensure that the community is engaged and informed. In the Nairobi, Tanzanian and proposed South African operations there are less well defined communities as operations are situated in industrial parks. Safal subsidiaries will utilize the model developed for Kenya and apply it in Tanzania, where community interaction will be through local authorities, local government representatives and will also include neighboring industry. In South Africa community engagement and disclosure forms a mandatory part of the EIA process; ongoing engagement will be conducted as necessary, in keeping with the Group’s commitment to transparency.

Environmental documentation may be viewed at the following locations via the contact details provided:

Mabati Rolling Mills, Kenya
S. Suryanarayana
General Manager (Operations)
Mabati Rolling Mills Ltd, Mariakani
P.O. Box 87547, Mombasa, Kenya
Telephone: +254 41 33049 / 33020
Mobile: +254 735 511 150
E- mail: surya@mabati.com

A. K. Mitra
Manager (Projects)
Mabati Rolling Mills Ltd, Mariakani
P.O. Box 87547, Mombasa, Kenya
Telephone: +254 41 33049 / 33020
Mobile: +254 735 511 156
E-mail: mitra@mabati.com

Alaf Limited - Tanzania
M. J. Raghuram
General Manager
Alaf Limited
Dar es Salaam, Tanzania
Telephone: +255 22 2860010 - 14
Mobile: +255 784 324 229
E-mail: mj.raghuram@aluminiumafrica.com

P. K. Ganguly
Operations Manager
Alaf Limited
Dar es Salaam, Tanzania
Telephone: +255 22 2860010 - 14
Mobile: +255 784 988 856
E-mail: pk.ganguly@aluminiumafrica.com

Safal Steel (Pty) Ltd, South Africa
R. D. Graham
Regional CEO
Safal Group Southern African Region
Telephone: +27 11 823 4027
Mobile: +27 83 325 0396
E-mail: ronnie@safintra.co.za

Ashutosh Datta
Safal Steel (Pty) Ltd.
Mobile: +27 83 3250433
E-mail: datta.a@safalsteel.co.za

Client Documentation

File Name	Actions
Safal EAP _ Feb 27th_.pdf

**Information on IFC's Policy and Performance Standards on Environmental and Social Sustainability can be found at www.ifc.org/sustainability

IFC supports its clients in addressing environmental and social issues arising from their business activities by requiring its real sector clients to set up and administer appropriate grievance mechanisms and/or procedures to address complaints from Affected Communities in relation to environmental and social issues arising from IFC's clients' business activities. Since 2012, IFC's Financial Intermediary clients applying the Performance Standards are required to develop External Communications Mechanisms to receive and review inquiries or complaints from any interested party regarding the E&S risks and impacts of their operations.

For IFC projects that are active or under consideration, individual(s), or their authorized representative(s), who allege they have been or will be adversely affected by E&S risks or impacts arising from IFC's clients' business activities, may submit a complaint to IFC directly for consideration. When receiving an E&S complaint, IFC engages with complainants and works with its clients to find solutions to E&S concerns as quickly and efficiently as possible.

Complaints can be submitted to IFC online at www.ifc.org/escomplaints or by email to EScomplaints@ifc.org.

IFC complaint response is separate from and complementary to IFC’s clients’ project level grievance mechanisms and IFC’s Independent Accountability Mechanism (CAO). Lodging a complaint directly with IFC does not, at any time, restrict access to CAO.

Affected communities have unrestricted access to the Compliance Advisor Ombudsman (CAO), the independent accountability mechanism for IFC and MIGA. CAO facilitates the resolution of complaints related to IFC and MIGA projects and sub-projects, undertakes reviews of IFC’s and MIGA’s environmental and social compliance, fosters public accountability for their commitments, and enhances the environmental and social performance of IFC and MIGA.

Independent of IFC and MIGA management and reporting directly to the IFC and MIGA Boards of Executive Directors, CAO helps resolve issues raised about the environmental and social impacts of projects through a neutral, collaborative, problem-solving approach via its Dispute Resolution function. It also reviews IFC’s and MIGA’s compliance with environmental and social policies, assesses related harm, and recommends remedial actions through its Compliance function. Additionally, CAO provides advice to IFC, MIGA, and their Boards to enhance environmental and social sustainability performance and minimize the risk of harm.

Complaints may relate to environmental and social harm regarding any aspect of the planning, implementation, or impact of a project or sub-project, and can be made by any individual, group, community, entity, or other party affected or likely to be affected by the environmental or social impacts of an IFC- or MIGA-financed business activity.

Complaints can be submitted by any of the following methods:

Online form: available at https://www.cao-ombudsman.org/
Mail/Hand Delivery to: 2121 Pennsylvania Avenue, NW, Washington, DC 20433, USA
Voice mail: +1 202 458 1973
Email: cao@worldbankgroup.org
SMS, WhatsApp, Telegram, and Signal: +1 202 650 2627

CAO receives and addresses complaints in accordance with the CAO Policy, which can be accessed at: https://www.cao-ombudsman.org/policies-guidelines.

This Environmental and Social Review Summary (ESRS) is prepared by IFC to disclose its findings and recommendations related to environmental and social considerations regarding potential investments. Its purpose is to enhance the transparency of IFC's activities. For any project documentation or data included or attached herein, whether prepared by the project sponsor or otherwise, authorization has been given for public release by the project sponsor. IFC considers that this ESRS is of adequate quality for release to the public, but has not necessarily independently verified all of the project information therein.
It is distributed in advance of IFC Board of Directors' consideration and may be periodically updated thereafter. Board dates are estimates only and this document should not be construed as presuming the outcome of the Board Directors’ decision. The following ESRS is disclosed in accordance with IFC's Access to Information Policy (AIP).

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 & Social Review Summary

Project Description

Overview of IFC's Scope of Review

E & S Project Categorization and Applicable Standard

Identified Applicable Performance Standards

Environmental and Social Categorization and Rationale

Environmental and Social Mitigation Measures

Environmental and Social Mitigation Measures

Stakeholder Engagement

Stakeholder Engagement

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