The project sponsor is Safal Investments (Mauritius) Limited who the major shareholder of the project companies which are Mabati Rolling Mills Ltd, Alaf Ltd and Safal Steel (Pty) Ltd. The shareholding of Safal Investments (Mauritius) Limited is equally held by Chandaria and Shah Families.

The total project cost is estimated at $217 million. The proposed IFC investment would be up to $60 million comprising of A loans, C loans and guarantees for local currency bonds in Kenya and Tanzania.

74.69 million (USD)

Product Line	IFC Investment (million USD)
Risk Management
Guarantee	34.69
Loan	40.0
Equity

* These investment figures are indicative

The three sites of the proposed investments to be implemented are as follows:

- Kenya:

Safal’s existing facility in Mariakani, which is a small town just off the main highway to Nairobi, and about 30 kilometers from the main port of Mombasa.

- Tanzania:

Safal’s existing facility in Dar es Salaam, located in an industrial zone.

- South Africa:

The proposed greenfield site is in the industrial park zone at the Ethekwini Metropolitan Area at Cato Ridge in Durban. Cato Ridge is in close proximity to the main road and rail network, with good access to power and water supplies, and at a distance of 35 kilometers to the Durban port.

The project will increase the availability of high quality competitively priced roofing products for the low/middle income households across Eastern and Southern Africa. The project will benefit from the management expertise of a strong sponsor, who has significant technological know-how both in investment and production. It will also create direct job opportunities, for about 500 employees, who will benefit from Safal’s well developed training scheme. Safal has been active in providing services to the community. As part of the project and based on its successful experience in Kenya and Uganda, Safal is looking to establish a third clinic at its Tanzanian manufacturing site as well as expand the curriculum at the technical school as a component of the proposed project.


IFC would be helping a successful African company:

- meet the demand of low income groups for cheap roofing material;
- develop a regional presence through South-South investments, important for improving the stability of the region by strengthening the cross border cooperation and regional economic growth;
- reduce market risk with a geographically diversified revenue stream;
- introduce modern technologies which will enable Safal to produce better quality products at lower costs; and
- IFC’s participation and expertise will contribute to the realization of an investment program that meets World Bank Group and country standards.

The proposed partial guarantee of local currency bonds in Kenya and Tanzania will help develop the local bond markets in these countries.

This Category B project has limited specific environmental and social impacts that can be avoided or mitigated by adhering to generally recognized performance standards, guidelines, and design criteria. The company purchases steel coils manufactured internationally and reprocesses them into a variety of coated roofing sheets and building cladding products. Steel preparation steps such as pickling have acid recycling plants that recycle 99% of acid and produce a byproduct sold to the paint industry. The operations produce limited air emissions from cold rolling of steel and utilization of fuels for heating and drying operations. Virtually all solid waste consists of metals used in manufacturing and these valuable materials are sold to recycling companies. The company has a very mature environmental management program and occupational health and safety program with internationally recognized certifications. Existing operations are engaged in continuous improvements to reduce waste and energy consumption. The planned South African Greenfield plant will be a state of the art operation.

The Environmental and Social Risk Rating (ESRR) for IFC’s existing investment in Safal’s Kenyan operations is B-1 Good.