STC is a closely held entity with majority stake held by family of Mr. Aik Htun, and his son Mr. Aung Zaw Naing (‘the Sponsors’). STG was founded in 1990 by Mr. Htun and the Group has been present in the building material business for more than two decades.

The total Project cost is estimated at US$110 million. The proposed IFC investment in STC comprises of investment in common equity for up to US$15 million and providing an A Loan of up to US$20 million. IFC is also looking to mobilize upto US$20 million through syndication of Parallel Loans and upto US$20 million investment in common equity from IFC AMC Emerging Asia Fund (“EAF”).

The balance portion of the Project cost will be financed through internal accruals, fresh equity infusion from Sponsors and other loans.

35.0 million (USD)

Product Line	IFC Investment (million USD)
Risk Management
Guarantee
Loan	20.0
Equity	15.0

* These investment figures are indicative

STC’s cement plant is located in the Thazi District, Mandalay region of Myanmar, 330 miles from Yangon.

1. Private sector development in a FCS: IFC's proposed investment will contribute to private sector development and support increase in economic activity in Myanmar, an IDA and FCS country. 2. Increase local supply of cement: The Project will support Government of Myanmar's initiative of reducing import dependency, preserving foreign exchange and providing access to affordable construction materials by increasing the role of private sector in cement manufacturing. Improved supply of cement in turn, will provide a boost to the development of key sectors like infrastructure, housing etc. 3. Employment generation and local economic activities: The Project is expected to create about 200-300 new direct jobs and about 500-700 indirect jobs. Besides, the Project will also create more than 1000 temporary jobs during the construction period. The Project will also create new business opportunities in the local economy due to increased demand for ancillary services. In particular, it will benefit those small and medium enterprises engaged in providing logistic, maintenance and general services to the Company. In addition, the communities close to the plant sites will benefit by the way of induced job creation effects as they will provide local services and supplies to the plant and its employees. 4. Demonstration effect: IFC's investment in the sector will send a positive signal to other investors considering investments in the country and attract future capital flow into the sector. IFC's involvement with the client will also help showcase E&S best practices, resource efficiency and cleaner production norms alongside serving as a catalyst for other firms to raise their standards such areas.

1. Long term financing: STC requires long term capital commensurate with the project requirements and the intrinsic cyclicality of the cement sector. The proposed IFC investment and mobilizations will bridge this gap and provide the necessary financing to the Company. 2. E&S Management: Association with IFC will help STC to upgrade its environmental, health, and safety (EHS) standards by improving its environment & social management system. This in turn should enhance the group's reputation by reducing the risk of adverse impacts on issues like local community relationship, clean production and help in its delivery of corporate social responsibility. 3. Global sector expertise: In its next phase of growth, STC is looking to be competitive with international cement producers and create a long term sustainable business model. IFC's global knowledge of the cement and construction material sector is likely to benefit the company in their endeavor. 4. Corporate Governance standard setting: IFC is also advising STG on improving its corporate governance standards. IFC's Corporate Governance unit is engaged with the client to conduct diagnostic assessment of existing corporate governance structure, develop a corporate governance roadmap and provide support in implementing such roadmap.

The project is defined as a category A project according to IFC’s Policy on Environmental and Social Sustainability as it has the potential for significant adverse environmental impacts. These impacts relate primarily to biodiversity given the land where the limestone quarry for the cement plant and the area where the coal mine are located are defined as Critical Habitat in accordance with PS6: Biodiversity Conservation and Sustainable Management of Living Natural Resources.

Other than the issue outlined above, other key environmental and social (E&S) issues associated with the project include; i) the need to enhance existing environmental and occupational health and safety management systems allied to capacity to ensure effective implementation thereof; ii) need for strengthening the approach to human resource management to ensure alignment with Performance Standard 2: Labor and Working Conditions; iii) management of point source and fugitive dust emissions; iv) solid and liquid waste management including the storage of hazardous materials aligned with accepted practices; v) storm-water management; vi) effective management of traffic and transportation in the vicinity of the plant and on public roads; and vi) focused and sustained stakeholder engagement, notably with the communities in the vicinity of the cement plant and the coal mine. In addition, there is a need to further assess specific aspects related to water management and biodiversity so as to inform the project.

Please refer to the Environmental and Social Review Summary (ESRS) linked to this project's SII under "Related Environmental Documents".

Please refer to the E&S Action Plan tab in the Environmental and Social Review Summary (ESRS) linked to this project's SII under "Related Environmental Documents".