ENVIRONMENTAL REVIEW SUMMARY


Project Name AEF/NIGERIA: Hercules Tyre Nigeria Limited

Region Sub-Saharan Africa

Sector General Manufacturing

Project No. 009479
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1. Hercules Tyres Limited have been engaged in tyre importation and sales since 1992. However, the project is a diversification into the retreading of used vehicle tyres with a special focus on the retreading of trailer and truck tyres for fleet owners. The installed annual capacity operating on a single 8 hour shift will be 30,000 truck tyres, 7,500 light commercial vehicle tyres and 7,500 car tyres. The project will help to reduce transportation costs in Nigeria by producing safe and cheap tyres for road haulage transportation. The principal sponsor is an Indian national with extensive experience in commodity trading, tyre sales and textiles.

2. The project is based on the cold process of retreading which produces high quality tyres of comparable safety standards to new tyres. This process involves the following steps: first, the tyre casings are inspected; then they are buffed to remove the old worn tread design. This is typically carried out using a lathe. Repairs are then undertaken, in particular, damage from nails and or sidewall injuries. Cushion gum is added as the adhesive layer to the back of the tread. This bond is created using a low temperature process where the tyre is encased in a flexible rubber envelope and then placed in a pressure chamber to prevent distortion. No excessive heat is applied.

3. 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 key environmental health and safety issues that were analyzed are as follows:

· Site selection and location;
· Solid and liquid and hazardous waste management;
· Waste recycling;
· Air emissions;
· Storage and handling of chemical and spill management;
· Water and power supply;
· Work place health and safety issues;
· Workers exposure to noise and air emissions;
· Fire prevention;
· Emergency procedures.

4. IFC has reviewed environmental information supplied by Chartered Aluminium. Key elements of this information are described below.

5. Land selection and location: The site is located within a designated industrial area which has yet to be fully developed. A gas bottling plant, as well as a steel mill, is currently located near to the project site. The whole of the industrial area was developed from swampland, which was reclaimed by the Lagos State Government. The site has never been in productive use before. The sponsor has begun the acquisition process for purchase of the factory site. The company’s lawyers have also carried out the search of the property title. Application has been made to the state administration requesting necessary change of ownership.

6. Solid and liquid and hazardous waste management: the plant process generates No liquid effluents. There will, however, be a small quality of dirty water produced during the operation of the factory premises. This will be discharged into the municipal sewer in accordance with the guidelines of the Waste Management Authority. Necessary approvals for all discharges will need to be obtained, and routine monitoring will need to be undertaken to ensure that all wastewater effluent discharges meet IFC requirements (see General Environmental Guidelines - effluent discharge concentrations).

7. Air emissions: The process to be used by the sponsor does not produce air emissions except for dust generated in the buffing of old tyres to remove the old worn tread design. There is also some dust created through the use of raw materials. The dust generated is not hazardous and is largely recycled into the process. The company intends to install a dust collection system to limit these emissions in the workplace. The small oil fired boiler and any diesel generating sets used for standby power generation need to be mounted on a cement concrete base and surrounded on all sides by some form of cement barrier to ensure that the structure can contain the entire contents of the fuel tank in the event of a spill or breach. The sponsor has advised that the Maintenance Manager will be responsible for ensuring that all emission control equipment is functioning well. The Quality Control Manager will also be required to monitor the same on a regular basis, and submit a periodic report to senior management which will be available for the Federal Environmental Protection Agency who carry out periodic surveys of the plant.

8. Storage and handling of chemicals and spill management: The sponsor has provided IFC with a list of raw materials which will be used in the operation of the plant. These products will be stored in a separate purpose built building. The factory layout has also been designed to minimize hazards as a result of the handling raw materials and only small quantities will be kept on the main factory floor. A regular training program will be implemented for staff with respect to the proper handling of hazardous materials, and in particular, the use of chemical solvents and adhesives.

9. Water and power supply: The sponsor has provided information regarding the tyre retreading process which indicates that only small quantities of water are used. A small quantity will be required for the cooling lines, for example, and the sponsor has indicated that this water will be recirculated. Borehole sources will be used to supply the water which will be installed by the company. The primary source of power to the factory is the Nigerian electric Power Authority ( N.E.P.A) via the national grid.

10. Work place health and safety issues: Staff will receive regular training in health and safety as well as fire prevention and response. Plant and equipment being is new state -of-the-art equipment with safety features already included in the design.
11. Workers exposure to noise and air emissions: the sponsor has indicated that the process employed in try retreating does not give rise to abnormal noise emissions.

12. Fire prevention: The plant incorporates a sprinkler system. Chemical fire extinguishers will be provided at strategic points in the factory. Hoses will also be provided to fight fires, which occur on the plant periphery. Regular fire drills will be carried out and the Local Fire Department will carry out an annual survey and issue a certificate of compliance for fire safety.

13. Emergency procedures: The sponsor will ensure that an emergency plan is prepared in liaison with the local fire authorities and or emergency services.

14. Based on its review of available information regarding potential environmental impacts and proposed mitigation measures, IFC concludes that the proposed project is being designed and will be operated to meet pertinent Government of Nigeria requirements and all relevant World Bank policies and environmental, health and safety guidelines.

15. IFC will monitor ongoing compliance with World Bank Group policies and guidelines during the life of the project by reviewing and evaluating the Environmental and Social Monitoring Reports (AMR''s) to be submitted annually to IFC by the sponsor, and by conducting periodic site visits during project supervision.