As was common during that time, Kuibyshevazot started its operations in 1965 as a state-owned enterprise (SOE). It was subsequently privatized through an employee stock ownership plan (ESOP). At present, the senior management of Kuibyshevazot owns about 30% of all shares outstanding, while middle management owns an additional 23%. The rest are distributed among other current or former employees.

15.0 million (USD)

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

* These investment figures are indicative

The company is located in an industrial area in Togliatti, Samara region, Russian Federation. It is easily accessible by rail, road and river transportation.

The company has expended considerable effort to upgrade its production processes and facilities to: - minimize waste, - reduce utilities consumption and - improve treatment of potentially harmful discharges. Nonetheless, the project will help further enhance the company’s environmental practices by benchmarking them against global standards and upgrading them where necessary. The project will help finance the continuing modernization, expansion and development of production capacities of existing products, and build new plants which are forward integrated with existing ones. Investments in new railcars will further improve the transportation of the company’s products. Kuibyshevazot is an important employer in a region with a high unemployment rate. Since 2002, it has increased its number of employees for the first time in the last 10 years because of the new facilities. As of October 1, 2004 the company has 5,044 employees, which is 24% higher that the number in 2001. IFC plays an important role in providing long term debt financing for the company’s investment program. Other than commercial bank loans, Russian companies comparable to Kuibyshevazot are able to access the capital market via the issuance of corporate bonds but generally the bonds are similar to those issued by Kuibyshevazot, i.e. they have tenors of three years and the bondholder typically has an option to put the bond back to the issuer. IFC’s involvement in the project will encourage the company to further strengthen its corporate governance practices. Although IFC’s Corporate Governance team has ranked the company as a regional leader, there is potential for significant improvement as indicated by the team’s recommendations. Kuibyshevazot management is receptive to the recommendations and will proceed to implement them. The company’s work with IFC in the corporate governance and environmental areas will provide it a credible stamp of approval which will help raise its profile and further facilitate its access to the capital markets, both domestic and international. We believe the company’s success will have a significant demonstration effect for other mid sized Russian companies undergoing a similar transformation.

This is a category B project according to IFC’s Environmental and Social Review Procedure. Environmental, social and health and safety issues associated with this project include:

- Environmental impact and safety management of associated facilities;
- Plant site past contamination and HAZOP review;
- Occupational health and safety issues;
- Corporate capacity in environmental management and monitoring; and
- Sustainable community relations and HIV initiatives.
An Environmental, Social, Health and Safety (ESHS) audit is currently underway, and based on the audit findings and the resulting Environmental and Social Action Plan (ESAP), Kuibyshevazot will develop and implement a complete set of environmental, occupational health and safety activities and management tools to meet best practices. The ESAP will include a number of activities that will be implemented during the life of the IFC Project. Additionally, as part of its partnership with IFC, Kuibyshevazot will consider programs or projects to improve energy efficiency and minimize discharges to the natural environment.
Location of environmental documents in locally affected community
Environmental documents will be made available at the company’s administrative office located at 6 Novozavodskaya str., 445652 Togliatti, Samara Region, Russian Federation .