Environmental & Social Review Summary
Project Number
9369
Company Name
KREENHOLMI VALDUSE AS
Date ESRS Disclosed
Feb 5, 2010
Country
Estonia
Region
Europe
Last Updated Date
Dec 31, 2016
Environmental Category
B - Limited
Status
Completed
Previous Events
Approved : Oct 10, 2000
Signed : Jan 19, 2001
Invested : Mar 6, 2001
Sector
Integrated Textile Operation (Spinning, Weaving/Knitting, but no Garment )
Industry
Manufacturing
Department
Gbl Ind, Manufact, Agribus & Services
Project Description
-3-
October 18, 1999
International Finance Corporation
A Member of the World Bank Group
International Finance Corporation
A Member of the World Bank Group
Environmental Review Summary (ERS)
A Member of the World Bank Group
International Finance Corporation
A Member of the World Bank Group
Environmental Review Summary (ERS)
Project Name Estonia - Krenholm
Region Central and Southern Europe
Sector Textile
Project No. 009369
1. The Krenholm Group, established in 1857, is a vertically integrated Estonian producer of cotton based textiles. Krenholm is located in Narva, in the northeastern part of Estonia, near the Russian Border. It is the largest industrial company in Estonia and most of the Company''s sales are exported to Western Europe and the US. The proposed project is to modernize and strategically focus Krenholm''s textile operations by investing in new machinery and equipment for the various operating units, and improving the environmental aspects of Krenholm’s operations (including the installation of energy efficient lighting and two boiler-houses for steam generation). The project also includes the purchase of the land which the Company occupies.
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 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 this project were analyzed:
· site locations;
· risks for contamination from past operations;
· air emissions;
· liquid effluents treatment and discharge;
· solid waste handling;
· energy reduction initiatives;
· employee health and safety; and
· social impacts.
The information provided about how these potential impacts would be addressed in Krenholm’s proposed project is summarized in the paragraphs that follow.
3. Krenholm’s production sites are located in Narva City and on an island on the River Narva, which defines the border with Russia. The location on the river is historic, as the first textile plant was water powered. Nowadays Krenholm is relying on Estonia’s energy and water resources. The textile production does not include significant air emissions, smell problems or noise generation. The plant proximity to the town allows the wastewater to be treated at the local municipal wastewater facility, which after treatment discharges directly to the Bay of Finland. The latter means that the project, despite being partly located on an island in an international river, does not invoke international waterways issues. As the textile production is rather labor intensive the location seems appropriate for continued operation.
4. Many of Krenholm’s buildings are old solid brick buildings dating back to the original textile mill company. Despite many years of operation on the same site the plant does not have significant soil contamination problems. The absence of problems is mostly due to the use of water power in the original concept and later energy supply from municipal steam and power plants. A localized contamination by a chemical storage area (dyestuff) at the finishing plant was removed years ago. In connection with the privatization in 1994 a brief audit was carried out. This audit did not reveal any significant environmental problems.
5. Krenholm does not have its own power generation at the moment, and air emissions are in general limited to exhaust from ventilation systems for dust removal from the spinning and weaving sections. These emission sources are minor and are filtered before release. As part of the project two natural gas fired boilers will be installed for both steam production and power generation. These boilers will be modern boilers with low-NOx burners and will comply with both local regulations and World Bank guidelines. The installation of these boilers will remove a significant energy spill, caused by several kilometers of poorly insulated and leaking steam and heat transmission pipes from the public Baltic Station power plant. The Baltic Station is oil shale fired and has significant dust emission problems. The installation of Krenholm''s boilers will reduce the load on the Baltic Station, and thereby reduce the dust emissions from this plant.
6. Krenholm discharges its wastewater to the public sewage system of Narva city. As part of the project Krenholm will optimize its operations and consequently reduce the wastewater volume. All sewage in Narva is treated in the public operated wastewater treatment plant before release to the Bay of Finland. The wastewater treatment plant was inspected and found to comply with both local regulations and World Bank guidelines for the discharge water. There are two problems at the wastewater treatment plant which influence Krenholm''s operations. The chrome concentration in the treated wastewater is acceptable but near the limits. Most of this chrome (approximately 2/3) is known to come from a tanning plant in Narva the remainder is likely to come from Krenholm’s discharge of wastewater from the dyeing at the finishing plant. Krenholm has agreed to carry out a complete review of all its dyestuff consumption to find and eliminate any heavy metal complex based dyestuffs currently used. This is in line with current industry trends and good industrial practice. It will further ensure that Krenholm will not have a part in any future potential heavy metal problem from the municipal wastewater treatment plant. The second problem is that the municipal wastewater treatment plant will need improved maintenance to keep the treatment quality in the future. Krenholm will therefore need to reduce its wastewater generation (as included in the project), or expect increased contribution to the maintenance budget for the plant.
7. Krenholm’s solid waste handling is relying on licensed local waste handling companies. Further, a new hazardous waste disposal facility has been constructed near Narva, and in the late summer of 1999 a consortium of local companies was awarded the operational contract for this facility, which was partly funded by PHARE (EU financing).
8. A part of the investment program includes replacement of more than 16,000 outdated technology lighting fixtures with a modern low energy lighting system. The replacement will result in significant energy savings and will at the same time improve the working conditions in the plant. Krenholm complies with local requirements and World Bank guidelines for occupational health and safety.
9. When Krenholm was privatized on January 1, 1995, the privatization agreement guaranteed that for 3 years at least 2,000 of the 5,700 employees (as of year-end 1994) would be able to keep their jobs. By late 1999 Krenholm has maintained an employment of approximately 4,700 people. This is significantly above the original agreement and shows Krenholm’s high commitment to the local community. However, Krenholm will inevitably need to reduce its workforce to remain competitive in the world market. To ensure that future lay-offs will be carried out in a fair manner, Krenholm has agreed to prepare a retrenchment plan. The retrenchment plan will guide the company’s effort to adjust its work force to a sustainable number, while limiting the social implication as much as practically possible.
10. IFC will monitor ongoing compliance with World Bank environmental, health and safety policies and guidelines during the lifetime of the project by evaluating reports submitted annually to IFC by Krenholm and by conducting periodic supervision.
11. Based on its review of available information regarding potential environmental impacts and proposed mitigation measures, IFC concludes that Krenholm’s proposed project will meet World Bank environmental, social, health and safety policies and guidelines and host country requirements.
Environmental and Social Mitigation Measures
Broad Community Support
Related SII
