Atul was established in 1947 as part of the Lalbhai Group of companies (the “Group”), one of India’s large business houses. The Lalbhai Group’s main businesses now include textiles, chemicals, engineering and finance. The Sponsors have a 36% shareholding in Atul, with the balance held by the general public (31%), financial institutions (18%) and other corporates (15%).

The total project cost is estimated to be $47.0 million. IFC’s proposed investment in the project is up to $22.5 million on IFC’s own account of which up to $7.5 million would be in the form of equity and the balance in the form of an A loan.

22.50 million (USD)

Product Line	IFC Investment (million USD)
Risk Management
Guarantee
Loan	17.50
Equity	5.0

* These investment figures are indicative

Atul Ltd. owns two manufacturing sites in Gujarat State, India: 1,250-acre Atul site and 33-acre Ankleshwar site. There are five manufacturing divisions at Atul site, which include agrochemicals, bulk chemicals & intermediates, colors, pharmaceuticals & intermediates, and polymers. Aromatics division is located at Ankleshwar site. The project is being implemented at both of the Company’s sites. The Atul site is located by the Par River, which is approximately 8-km from the Arabian Sea. Majority of the Atul site is undeveloped, and Atul preserves the undeveloped part as a natural protection area, cooperating with World Wildlife Fund (WWF) – India. There is no other industry in the Atul area. There are approximately 1,100 houses in Atul’s residential colony inside the Atul Site. The other nearby farming community is approximately 1.5 km from Atul site. The major land usage in the Par River basin is mango orchard. There are no endangered species in or near the Atul site. The Ankleshwar site is located inside a chemical industry park – Ankleshwar industrial estate, which is one of the largest in India and well organized.

This is a Category B project according to IFC’s Procedure for Environmental and Social Review of Projects because a limited number of specific environmental and social 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/social information submitted by the project sponsor and a field visit to both Atul and Ankleshwar sites in Gujarat State, India. The following potential environment, health, safety (EHS), and social impacts of the projects were analyzed.

- Land and natural environment;
- EHS management system;
- Water source and wastewater treatment
- Air emissions and ambient air quality;
- Workplace and ambient noise levels;
- Solid and hazardous waste management;
- Operation hazard and hazardous materials;
- Occupational health/safety;
- Fire prevention and emergency response;
- Labor situation; and
- Community relationship.
Location of environmental documents in locally affected community
Environmental documentation will be made available at the following location: Administrative Office, Atul Ltd., Atul, District Valsad, Gujarat, India Phone: +91 632 233261-65

The Project is expected to enhance Atul’s international competitiveness by improving the Company’s operational efficiencies, rationalizing its product portfolio and infusing long term capital. The Project will assist in upgrading the environmental performance of Atul’s facilities and in obtaining ISO 9000 accreditation. These benefits can be expected to have a positive demonstration effect through encouragement to other Indian chemical companies to improve competitiveness in the global markets and improve environmental standards. To support Indian industry compete globally, IFC plays an important role by investing in medium sized manufacturing companies that are restructuring and modernizing to become internationally competitive. IFC role in this transaction is to help the Company access longer term financing, provide additional comfort to potential investors and help the Company strengthen its Environment, Health and Safety practices. IFC’s participation is, therefore, expected to help strengthen the Company’s cash flows and allow it to become more competitive in this cyclical and capital-intensive industry.