Environmental & Social Review Summary
Project Number
8974
Company Name
Vulcabrás Azaléia CE, Calçados e Artigos Esportivos S/A.
Date ESRS Disclosed
Feb 5, 2010
Country
Brazil
Region
Latin America and the Caribbean
Last Updated Date
Dec 31, 2016
Environmental Category
B - Limited
Status
Completed
Previous Events
Approved : Dec 14, 1998
Signed : Feb 28, 1999
Invested : Apr 21, 1999
Sector
Shoes and Leather Products
Industry
Manufacturing
Department
Regional Industry MAS LAC & EUR
Project Description
- 4 - 15th May ,1998
International Finance Corporation
A Member of the World Bank Group
International Finance Corporation
A Member of the World Bank Group
Environmental Review Summary (ERS)
Project Name BRAZIL: Vulcabras do Nordeste S.A. (VSA)
Region Latin America & Caribbean
Sector Manufacturing
Project No. 008974
1. This project involves the construction of a new state-of-the-art shoe manufacturing plant in Horizonte, a town of 20,000 inhabitants located some 50 miles outside of Fortaleza, Ceara State, a relatively under developed area of Northeastern Brazil. The project will create jobs for 1,700 skilled workers who will be trained on the job; the new plant will have a capacity to make 10,000 shoes daily. The sponsor Vulcabras S.A. (VSA) is part of the Grendene Group, a large Brazilian industrial group with interests in furniture making, shoe manufacturing, cattle raising and the production of industrial alcohol. Grendene is the largest shoe producer in Brazil; its shoe line includes ladies sandals, plastic slippers, rubber boots, athletic shoes and leather workshoes. This project is part of a Grendene’s strategy to improve competitiveness by updating technology and making use of fiscal incentives offered by the state of Ceara.
2. VSA’s primary products are high performance “branded” athletic shoes which are produced under licence; the company’s know-how for making athletic shoes is provided by the international brand owners who specify materials, processes and equipment. Strict quality control by the licensors requires products to meet the highest international standards. As a result of increasing competition from imports, Vulcabras has embarked on an investment program to lower production costs and improve product quality while at the same time expanding output. The new plant includes new technology and high efficiency automated equipment to increase production volumes and improve worker productivity. An integral component of the project involves worker training and motivation programs to raise product quality and production efficiencies.
3. The project was started in 1996 and will be completed in Summer 1998. VSA has closed its two existing operations in Sao Paulo, and moved much of the equipment to Horizonte. The investment will be made in the Northeast region of Brazil, an area with high unemployment and low income levels where development has been given a high priority by the Brazilian Government. Raw materials are specified by the licensor and consist of mostly synthetic leather, nylon mesh, rubber and polymerized vinyl acetate. The company obtains 90% of its raw materials (by value) locally, and imports only special compounds or specific items for which volumes do not justify local production.
4. 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 Environmental Department staff. The following potential environmental, health and safety impacts of the project were analyzed:
· site history and land use;
· social impacts from workforce reductions;
· air emissions;
· effluent treatment and discharge;
· solid and hazardous waste management;
· hazardous materials handling and storage;
· fire prevention and emergency response; and
· workplace health and safety.
5. The new plant is on a site of approximately 300,000 m2, with the area for construction approximately 32,000 m2. It is situated on the boundaries of the city of Horizonte (at the Rodovia BR 116) and has not been previously occupied. The relocated production system is state–of-the-art in shoes production; all of the installations operate to modern, efficient standards. The plant is laid out in six distinct operation groups and is clean and well arranged. Two CNC cutting machines were installed in April 1998 and this will improve upon the quality and productivity of the present manual cutting operations. A new line for making rubber boots was also completed in April 1998.
6. With respect to the social impacts of workforce reductions already completed by Vulcabras, the sponsor has indicated that it terminated the employment of about 1,700 workers in a factory in Jundiai City near to Sao Paulo in 1996 and early 1997 after consultation, as well as the award of severance pay. All workers were given at least three months’ notice, and all rights established under Brazilian Labor law, as well as any Union Agreements were observed. Vulcabras also maintained workers medical insurance for another three months after termination, and in most cases paid additional salaries. The sponsor has advised that this region has changed its economic profile over the past few years, with traditional industries being replaced by new activities. The sponsor has also indicated that specialized agencies working under the Commerce and Industry Federations have implemented training and placement programs for the Sao Paulo workforce to find jobs within these new activities.
7. There are no boilers present on site, and electric power is derived direct from local grid supply. Air emissions, however, arise during process manufacture in the rubber formula mixture preparation, as well as in sole and boot manufacturing in and around the assembly line and press machine. Evaporation of adhesives and solvents gives rise to point source emissions. Protective hoods or cowls are installed on relevant machinery to achieve appropriate ventilation and dispersion for dust and gaseous pollutants including SO2. Air filtration units present in the process manufacturing areas of the plant are replaced and cleaned twice per day. Monitoring within the factory indicates that Vulcabras are in compliance with relevant Brazilian legislation for workplace air quality.
8. VSA has installed an effluent treatment plant for the treatment of domestic sewage and restaurant discharges and which has local approval. The sponsor has also indicated that random compliance audits are performed by Government on these discharges, and that Vulcabras have to date been in compliance with the limits imposed.
9. Manufacturing by-products are recycled or sold to convertors. Solid wastes are currently separated into paper, plastic and metal wastes. Vulcabras estimates that it sells approximately 300 tons of primary waste materials per annum. Other wastes are disposed to municipal sanitary landfills. All materials disposed at landfill are handled by a Government approved contractor.
10. A specific warehouse has been dedicated by Vulcabras for the storage of hazardous materials, in particular, inflammable materials such as adhesives and solvents including triethylamine. Measures are also taken by Vulcabras to ensure the safety of these materials including appropriate storage, ventilation as well as measures to minimise the risk of explosion. The sponsor also actively controls the quantities of these products used inside the factory, to volumes which are not in excess of local regulations.
11. Vulbabras has an established program for workplace health and safety and maintains high standards for fire prevention and emergency response. Trained staff include one safety engineer and four safety technicians, together with two physicians and a nurse, who are permanently employed to deal with maintaining an appropriate level of safety and worker health in the plant. Fire-fighters are also present (with equipment) on site and the sponsor has indicated the presence of an fire-alarm system.
12. Protection masks, gloves and protective aprons/uniforms are issued to workers and the sponsor has a full program of training in accident risk management. Employees are also trained to respond to emergency situations. Medical examinations are carried out on staff on a periodic basis. The sponsor is in compliance with local regulations on a programme of preventing environmental risks (PPRA) as well as PCMSO, a medical control and occupational health program. Workers are also provided with personal protective equipment such as hearing protection and steel-toe shoes. Noise levels within the interior of the plant have been monitored at less than 80dBA, and are therefore in compliance with World Bank guidelines.
13. Based on its review of available information regarding potential environmental impacts and proposed mitigation measures, IFC concludes that the proposed project is being designed to meet Brazilian requirements, and World Bank policies and environmental, health and safety guidelines.
14. IFC will monitor VSA’s ongoing compliance with World Bank policies and guidelines during the life of the project by evaluating monitoring reports submitted annually to IFC by the sponsor, and by conducting periodic site reviews during project supervision.
C:\TEMP\ERSBRAVUL.DOC
May 15, 1998 2:30 PM
International Finance Corporation
A Member of the World Bank Group
International Finance Corporation
A Member of the World Bank Group
Environmental Review Summary (ERS)
Project Name BRAZIL: Vulcabras do Nordeste S.A. (VSA)
Region Latin America & Caribbean
Sector Manufacturing
Project No. 008974
1. This project involves the construction of a new state-of-the-art shoe manufacturing plant in Horizonte, a town of 20,000 inhabitants located some 50 miles outside of Fortaleza, Ceara State, a relatively under developed area of Northeastern Brazil. The project will create jobs for 1,700 skilled workers who will be trained on the job; the new plant will have a capacity to make 10,000 shoes daily. The sponsor Vulcabras S.A. (VSA) is part of the Grendene Group, a large Brazilian industrial group with interests in furniture making, shoe manufacturing, cattle raising and the production of industrial alcohol. Grendene is the largest shoe producer in Brazil; its shoe line includes ladies sandals, plastic slippers, rubber boots, athletic shoes and leather workshoes. This project is part of a Grendene’s strategy to improve competitiveness by updating technology and making use of fiscal incentives offered by the state of Ceara.
2. VSA’s primary products are high performance “branded” athletic shoes which are produced under licence; the company’s know-how for making athletic shoes is provided by the international brand owners who specify materials, processes and equipment. Strict quality control by the licensors requires products to meet the highest international standards. As a result of increasing competition from imports, Vulcabras has embarked on an investment program to lower production costs and improve product quality while at the same time expanding output. The new plant includes new technology and high efficiency automated equipment to increase production volumes and improve worker productivity. An integral component of the project involves worker training and motivation programs to raise product quality and production efficiencies.
3. The project was started in 1996 and will be completed in Summer 1998. VSA has closed its two existing operations in Sao Paulo, and moved much of the equipment to Horizonte. The investment will be made in the Northeast region of Brazil, an area with high unemployment and low income levels where development has been given a high priority by the Brazilian Government. Raw materials are specified by the licensor and consist of mostly synthetic leather, nylon mesh, rubber and polymerized vinyl acetate. The company obtains 90% of its raw materials (by value) locally, and imports only special compounds or specific items for which volumes do not justify local production.
4. 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 Environmental Department staff. The following potential environmental, health and safety impacts of the project were analyzed:
· site history and land use;
· social impacts from workforce reductions;
· air emissions;
· effluent treatment and discharge;
· solid and hazardous waste management;
· hazardous materials handling and storage;
· fire prevention and emergency response; and
· workplace health and safety.
5. The new plant is on a site of approximately 300,000 m2, with the area for construction approximately 32,000 m2. It is situated on the boundaries of the city of Horizonte (at the Rodovia BR 116) and has not been previously occupied. The relocated production system is state–of-the-art in shoes production; all of the installations operate to modern, efficient standards. The plant is laid out in six distinct operation groups and is clean and well arranged. Two CNC cutting machines were installed in April 1998 and this will improve upon the quality and productivity of the present manual cutting operations. A new line for making rubber boots was also completed in April 1998.
6. With respect to the social impacts of workforce reductions already completed by Vulcabras, the sponsor has indicated that it terminated the employment of about 1,700 workers in a factory in Jundiai City near to Sao Paulo in 1996 and early 1997 after consultation, as well as the award of severance pay. All workers were given at least three months’ notice, and all rights established under Brazilian Labor law, as well as any Union Agreements were observed. Vulcabras also maintained workers medical insurance for another three months after termination, and in most cases paid additional salaries. The sponsor has advised that this region has changed its economic profile over the past few years, with traditional industries being replaced by new activities. The sponsor has also indicated that specialized agencies working under the Commerce and Industry Federations have implemented training and placement programs for the Sao Paulo workforce to find jobs within these new activities.
7. There are no boilers present on site, and electric power is derived direct from local grid supply. Air emissions, however, arise during process manufacture in the rubber formula mixture preparation, as well as in sole and boot manufacturing in and around the assembly line and press machine. Evaporation of adhesives and solvents gives rise to point source emissions. Protective hoods or cowls are installed on relevant machinery to achieve appropriate ventilation and dispersion for dust and gaseous pollutants including SO2. Air filtration units present in the process manufacturing areas of the plant are replaced and cleaned twice per day. Monitoring within the factory indicates that Vulcabras are in compliance with relevant Brazilian legislation for workplace air quality.
8. VSA has installed an effluent treatment plant for the treatment of domestic sewage and restaurant discharges and which has local approval. The sponsor has also indicated that random compliance audits are performed by Government on these discharges, and that Vulcabras have to date been in compliance with the limits imposed.
9. Manufacturing by-products are recycled or sold to convertors. Solid wastes are currently separated into paper, plastic and metal wastes. Vulcabras estimates that it sells approximately 300 tons of primary waste materials per annum. Other wastes are disposed to municipal sanitary landfills. All materials disposed at landfill are handled by a Government approved contractor.
10. A specific warehouse has been dedicated by Vulcabras for the storage of hazardous materials, in particular, inflammable materials such as adhesives and solvents including triethylamine. Measures are also taken by Vulcabras to ensure the safety of these materials including appropriate storage, ventilation as well as measures to minimise the risk of explosion. The sponsor also actively controls the quantities of these products used inside the factory, to volumes which are not in excess of local regulations.
11. Vulbabras has an established program for workplace health and safety and maintains high standards for fire prevention and emergency response. Trained staff include one safety engineer and four safety technicians, together with two physicians and a nurse, who are permanently employed to deal with maintaining an appropriate level of safety and worker health in the plant. Fire-fighters are also present (with equipment) on site and the sponsor has indicated the presence of an fire-alarm system.
12. Protection masks, gloves and protective aprons/uniforms are issued to workers and the sponsor has a full program of training in accident risk management. Employees are also trained to respond to emergency situations. Medical examinations are carried out on staff on a periodic basis. The sponsor is in compliance with local regulations on a programme of preventing environmental risks (PPRA) as well as PCMSO, a medical control and occupational health program. Workers are also provided with personal protective equipment such as hearing protection and steel-toe shoes. Noise levels within the interior of the plant have been monitored at less than 80dBA, and are therefore in compliance with World Bank guidelines.
13. Based on its review of available information regarding potential environmental impacts and proposed mitigation measures, IFC concludes that the proposed project is being designed to meet Brazilian requirements, and World Bank policies and environmental, health and safety guidelines.
14. IFC will monitor VSA’s ongoing compliance with World Bank policies and guidelines during the life of the project by evaluating monitoring reports submitted annually to IFC by the sponsor, and by conducting periodic site reviews during project supervision.
C:\TEMP\ERSBRAVUL.DOC
May 15, 1998 2:30 PM
Environmental and Social Mitigation Measures
Broad Community Support
Related SII
