24066 - Continental Carbon of India Limited II

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Summary of Proposed Investment

Project Number

24066

Company Name

CONTINENTAL CARBON INDIA LIMITED

Date SPI Disclosed

Apr 3, 2006

Country

India

Industry

Manufacturing

Projected Board Date

May 3, 2006

Status

Completed

Sector

Carbon Black

Department

Gbl Ind, Manufact, Agribus & Services

Environmental Category

B - Limited

Previous Events

Approved : Jun 21, 2006
Signed : Jun 22, 2006
Invested : Jul 25, 2006

Project Description

Continental Carbon India Limited (“CCIL”, the “Company”), located in Ghaziabad, State of Uttar Pradesh, India, is a carbon black manufacturing company with the nameplate capacity to produce up to 65,000 tons per annum (tpa) of carbon black. The company has requested IFC assistance for the financing of its project, consisting of the following components:

- the construction and operation of about a 15 MW power co-generation facility;
- the de-bottlenecking and modernization of its existing carbon black facility; and
- the restructuring of the outstanding IFC A and B loan maturities in the amount of $11.75 million.

The project is scheduled to be completed in June 2008.

IFC financed the original project in 2001 (IFC/R2001-0017) which was to upgrade, modernize and expand an existing carbon black plant acquired from Oriental Carbon & Chemicals Limited, providing $9.0 million in A loan and $11.5 million in B loans.

Sponsor / Cost / Location

Product Line	IFC Investment (million USD)
Risk Management
Guarantee
Loan	7.0
Equity	2.0

Development Impact

The project will support the survival of a privately owned enterprise that has established a competitive operation. In particular, the project will:

- further improve the plant’s environmental standards by expanding power co-generation capacity and modernizing existing technical processes;
- help alleviate an acute power shortage in Uttar Pradesh through the sale of excess power;
- benefit the local economy through increased tax revenues; and
- support an important specialty chemical industry and promote sustainable growth of the tire industry by supplying high quality raw material efficiently.

Monitoring of development impact will focus primarily on the company’s power sales, carbon black conversion margins and debt service coverage ratios.

By supporting this project with long-term financing, IFC is helping a key supplier of carbon black and employment generator survive this difficult period of high and volatile feedstock costs while, at the same time, improving its global competitiveness and the sustainability aspects of its operations and helping alleviate the power shortage in Uttar Pradesh, one of the poorest states in India. IFC has provided advice on the company’s future strategic directions, the modernization of its existing technical operations and on structuring the overall financial package.

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/or social impacts may result, which can be avoided or mitigated by adhering to generally recognized performance standards, guidelines or design criteria.

Further details are provided in the Environmental Review Summary separately available with this document.
Location of environmental documents In locally affected community
Environmental documents, including the ERS and Corrective Action Plan (CAP) will be posted at the following locations:

- the Local School – Primary School Chipiyana Ghaziabad;
- the Notice Board outside CCIL Plant; and
- the Local Newspaper-(“Hint Ghaziabad”).

Contacts

For Inquiries About the Project, Contact

Mr. Deepak Malik
Managing Director
Continental Carbon India Limited
A-14, Industrial Area No. 1
(Off NH-24), South Side of G.T. Road,
Ghaziabad -201 001 (U.P.) India
Tel: (91) 120-2840501
Fax: (91) 120-2840504

This Summary of Project Information (SPI) is prepared and distributed to the public in advance of the IFC Board of Directors' consideration of the proposed transaction. Its purpose is to enhance the transparency of IFC's activities, and this document should not be construed as presuming the outcome of the Board decision. Board dates are estimates only. The following SPI is disclosed in accordance with IFC's Disclosure of Information Policy that went into effect September 1998.

The map is for illustrative purposes and does not imply the expression of any opinion on the part of the World Bank, concerning the legal status of any country or territory or concerning the delimitation of frontiers or boundaries. Country borders or names do not necessarily reflect the World Bank Group's official position. In some cases, available project location information is limited to the country of the project's activities. Locations are approximate.

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