The company was incorporated on September 1, 1997 as a joint stock limited company owned by the Anhui Provincial Government (prior to that, it was a state-owned enterprise). Conch has since had three public listings of its shares. Currently, 50.4% of the company’s shares are publicly traded on the Hong Kong and Shanghai stock exchanges. The other 49.6% of the company’s shares are owned by Anhui Conch Group Holdings Co Ltd (ACH). ACH is 51% owned by the Anhui Provincial Government and 49% owned by Conch employees.

The total project cost is estimated at $300 million equivalent. The proposed IFC investment is an A loan of up to $78 million equivalent.

78.54 million (USD)

Product Line	IFC Investment (million USD)
Risk Management
Guarantee
Loan	78.54
Equity

* These investment figures are indicative

Conch is headquartered in Anhui Province, with a primary focus on the Yangtze River Delta region (Shanghai and the neighboring provinces). The capital expenditures for 2005 will include, among other things, building new clinker production plants in Anhui province

Development Impact: - The continued growth of Conch would support the Chinese government’s policy of industry consolidation which promotes the growth of the larger, efficient producers of high quality cement (such as Conch), and the consolidation of small, inefficient and environmentally polluting producers of low quality cement; and - The investment would support the development of China’s capital markets through the issuance of IFC’s RMB Bond. By setting a precedent for a non-resident issuer, the IFC bond would set a non government benchmark in the market and set the precedent for other non government issuers as well as for the development of more sophisticated debt instruments. IFC’s Role: - IFC’s long-term financing can help Conch rationalize its capital structure and reduce its reliance on short-term debt, - IFC could introduce Conch to some of the other large international cement producers to broaden and deepen Conch’s knowledge of global best practices both in cement operations and corporate governance; - IFC can assist the company by providing strategic advice on how to integrate environmental and social management more effectively into its business model; - The successful issuance of the RMB Bond can enable IFC to set a positive precedent for a non-resident issuer and demonstrate the use of bond markets to target long term capital at efficient private companies.

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 site visits by IFC’s environmental and social specialists. The following potential environment, health and safety and social impacts of the projects were analyzed.

- Corporate management systems for environmental performance;
- Land acquisition, compensation and resettlement;
- Quarry operations and rehabilitation;
- Environmental performance of existing clinker kilns and cement plants;
- Environmental performance of future expansions;
- Emission reduction activities for greenhouse gas (CO2); and
- Health and safety standards.
Location of environmental documents in locally affected community
Anhui Conch’s headquarter: No. 209 East Beijing Road, Wuhu, Anhui, China, P.C: 241000, Tel: 0553-3114546 Anhui Conch’s Shanghai Office: No. 139, Yincheng Dong lu , Huaneng Building,,27/F, Pudong District, Shanghai, China. Tel: 021-68865096 Wuhu Municipal Building of Wuhu City: No.66, Beijing East Road, Wuhu, Anhui, China, P.C: 241000