Project Name Honduras-Corporacion Cressida, S.A. de C. V. (Cressida)

Region Central America

Sector Manufacturing

Project No. 007114 March 10, 1997


1. The project will be located in four main industrial facilities and involves:

(a) closing down Cressida’s existing soap and detergent factory in Tegucigalpa, Honduras as well as its sulfonation plant in Choloma, Honduras;

(b) building a new world-class manufacturing complex in Comayagua, Honduras that will include a soap and detergent facility, a sulfonation plant, a glycerin recovery facility and an edible-oil refinery;

(c) expanding and modernizing two existing food processing and fruit beverage plants in Comayagua, Honduras, for production of tomato-based products, tamales, beans, fruit drinks, dressings, jellies, and other food products;

(d) expanding and modernizing the existing soap and detergents facility in San Salvador, El Salvador; and

(e) modernizing and expanding the snacks plant in San Pedro Sula, Honduras.

2. This is a category B project according to IFC’s environmental review procedure because specific impacts may result which can be avoided or mitigated by adhering to generally recognized performance standards, guidelines or design criteria. The review of this project consisted of appraising technical and environmental information submitted by the project sponsor, and the technical appraisal and site review completed by IFC’s Technical and Environment Department staff. The following potential environmental, health and safety impacts of the project were analyzed:

· site location and land use;
· air emissions;
· liquid effluents;
· hazardous and solid wastes;
· use of non-ozone depleting refrigerants;
· product safety;
· pesticide management and overall agribusiness operations;
· fire prevention and explosion prevention;
· emergency response; and
· employee exposure to noise, temperature, dust and chemicals.

The sponsor has presented plans to address these issues and demonstrate that the proposed project will comply with applicable governmental and World Bank requirements no later than project completion date in December 1998. The information provided about how these potential impacts are addressed in the development of the project is summarized in the paragraphs that follow.

3. In order to assess the environmental, health and safety (EH&S) status of the existing operations, EH&S reviews were conducted at the plant with the technical and environmental assistance from IFC technical staff. The objective of the reviews was to identify needed environmental and occupational health and safety improvements required at the facility to comply with government requirements and applicable World Bank environmental, health and safety guidelines. As a result of the studies, the main areas identified as requiring improvements were:

· air emissions;
· liquid effluents;
· hazardous and solid wastes;
· occupational health and industrial safety;
· product safety;
· plant housekeeping; and
· fire safety.

4. The results of the EH&S reviews served as the basis for Cressida establishing a Corrective Action Plan (CAP) for the existing plants throughout Central America to ensure the facilities are upgraded to meet local governments (Honduras, El Salvador, Nicaragua) requirements and World Bank guidelines. The sponsor will submit a Corrective Action Plan (CAP) satisfactory to IFC and a report documenting the current environmental practices in the agribusiness operations as a condition of the first IFC disbursement. The CAP will identify the specific environmental actions required as well as the estimated costs and implementation schedules for each action. The report will serve as the base for IFC to determine whether additional improvements in the agribusiness operations are needed. In such a case, IFC and Cressida will then determine timetable and specific actions to be implemented. The approximate estimated cost associated with the implementation of the CAP is US$ 2 million.

5. The principal corrective actions planned are associated with the installation and/or upgrading of wastewater treatment plants, appropriate disposal of hazardous wastes, air emission controls, particular process improvements and Cressida’s Environmental Management Plan including a monitoring program that specifies parameters to be measured, methods and frequencies and the organizational structure to manage the environmental actions at corporate as well as at facility levels . The CAP will include specific actions in each plant to improve general housekeeping, and occupational health and safety. Many of these actions involve strengthening administrative procedures and employee training at the corporate and plant levels.

6. The new site for the manufacturing complex located in Comayagua is mainly rural/agricultural, is not located near protected areas and it will not require resettlement of populations. The small town of Comayagua which is about 7 km away will not be negatively affected by the new facility.

7. The sponsor will evaluate the wastewater practices on the existing facilities and implement additional controls as necessary to comply with relevant government requirements and World Bank guidelines.

8. The sponsor will evaluate the existing air emission concentrations in all facilities and will implement the controls needed to comply with relevant government regulations and World Bank guidelines.

9. Solid residues, in all facilities, will be recycled and or properly disposed as established by the local authorities. Ammonia is used as refrigerant, none of the facilities use non-ozone depleting refrigerants.

10. Cressida will evaluate the materials handling and packing operations in the food processing facilities and implement the corrective actions needed to ensure compliance with World Bank guidelines.

11. The sponsor will implement a strict safety program to minimize the risk of fires and explosions. Fire detection and fire fighting systems will be installed including fire extinguishers, fire hoses, water sprinklers and dedicated fire water systems. The plants will have well-trained and equipped fire brigades. Emergency power units will ensure adequate firefighting capabilities in case of emergency. All facilities will have emergency response plans in place.

12. The transportation, unloading and storage of flammable materials will be performed with strict safety procedures under the direct supervision of the Safety and Industrial Hygiene personnel in charge. The equipment involved on the loading operations (valves, pipes, etc. ) will be carefully checked to ensure that accidental spills will not occur.

13. Cressida’s sulfonation plant will only produce linear alkyl benzene sulfonates (LABS) on a commercial basis. Any process change in the sulfonation plant will have to satisfactorily demonstrate to IFC that such a change is consumer safe and fully complies with World Bank environmental, health and safety guidelines.

14. Cressida’s agribusiness operations have a very successful integrated pest management (IPM) program in place. Costs of operation have been significantly reduced as a result of the minimum pesticide quantities used and the reduced labor involved in the application of the pesticides. The success of the (IPM) program can be attributed, in great part, to the excellent training given to all the participants in the agribusiness program.

15. Cressida will establish strict Occupational Health and Industrial Safety programs to comply with governmental standards and World Bank guidelines. Employees of the manufacturing as well as the agribusiness operations will be trained with regard to safety rules, accident prevention, hazards of the workplace, spill prevention, fire safety and emergency response and use of Personnel Protective Equipment (PPE). The workplaces will be monitored for employee exposure to noise, dust temperature and chemicals. The employees will be provided with and required to use appropriate PPE when noise dust temperature and chemical levels are above the standards. There will be clearly signaled restricted areas where only authorized personnel is permitted.

16. Based on its review of available information regarding potential environmental impacts and proposed mitigation measures, IFC concludes that, with the implementation of the CAP, the proposed project is being designed to meet Governments of Honduras, El Salvador and Nicaragua requirements, as appropriate, and World Bank policies, and environmental, health and safety guidelines.

17. IFC will closely monitor Cressida’s progress of implementing the CAP. Thus, Cressida will provide a CAP progress report quarterly along with the typical Project Progress Report until the CAP is fully implemented. IFC will also monitor Cressida’s ongoing compliance with World Bank policies and guidelines during the life of the project by evaluating the environmental performance reports submitted annually (coinciding with the anniversary of the signing of the Investment and Guarantee Agreement) to IFC by the sponsor and by conducting periodic site reviews during project supervision.

18. The environmental performance reports submitted by the sponsor shall include at a minimum the following information for each facility:

· CAP implementation status;
· monitoring results of the liquid effluents;
· air emission concentrations;
· summary of the results of the workplace monitoring program for noise, dust and hazardous substances; and
· annual statistics for occupational accidents and illnesses including number of employees, work hours and lost-time incidents.



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March 14, 1997 5:52 PM