24669 - CTI Group I

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Summary of Proposed Investment

Project Number

24669

Company Name

CTI GROUP INC.

Date SPI Disclosed

Mar 7, 2006

Country

Jordan

Industry

Infrastructure

Projected Board Date

Apr 10, 2006

Status

Completed

Sector

Water Transportation

Department

Gbl Infrastructure & Natural Resources

Environmental Category

B - Limited

Previous Events

Approved : May 26, 2006
Signed : Jun 22, 2006
Invested : Jul 24, 2006

Project Description

Established in 1990 as a cement and clinker trading company, CTI Group Inc. (CTI or the Group) now ranks among the largest specialized cement carrier fleet owners in the world. The Group’s activities cover all aspects of logistics for the specialized cement trade including trading, handling, and transport. The Group is embarking on an investment program that will renew and expand its fleet. The fleet renewal will help CTI reduce its operating costs (staffing and insurance), optimize its fleet structure and expand its transport operations.

Over the next three years, the Group will need to fund vessel acquisitions & dry docking costs, and debt refinancing (the project). CTI plans to finance the project by a combination of IFC debt and equity, commercial debt, and cash from operations. The short term tenor of CTI’s existing debt is a constraint to the implementation of the Group’s vessel acquisition plan. CTI is looking to replace this existing shorter tenor debt with long-term financing that matches the long- term nature of its assets.

Sponsor / Cost / Location

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

Development Impact

The Group has had positive economic and developmental impacts and is expected to continue doing so due to the project. By shipping and trading cement between countries with cement production surpluses (and low prices) and countries facing shortages (and high prices), the Group allows both sides to benefit and enhances the efficiency of the global cement market. The project will facilitate cement exports from countries with excess supply (like Egypt, Thailand, China and India) to countries where there is a shortage of cement production capacity (like the US and the Middle East, as targeted by the company’s strategy). Therefore, both the cement industry in exporting countries and the construction industry in importing countries would benefit from the project. With an estimated 6.0-6.5% market share of seaborne cement trade, CTI is a significant player but not one of the largest, so its activities contribute to making the industry more competitive.

IFC’s long term financing will help fill a critical funding gap and allow CTI to match its long term assets with long term finance. For the IFC, this would be the first project in the transportation and logistics sector in the MENA region and would support a private Jordanian company in the international cement shipping and trading industry. The success of this Project would serve as a demonstration effect for local banks looking to finance shipping companies in the region. The successful penetration of a global and competitive market by Jordanian entrepreneurs could induce other entrepreneurs in the region to emulate their success. IFC’s equity investment and its involvement in the implementation of a Corporate Governance Improvement Plan will enhance the Group’s attractiveness ahead of the sale of shares to new investors.

This is a Category B project. The review of this project consisted of appraising technical and environmental information submitted by the project sponsor, and site visits and vessel reviews conducted by IFC staff and consultants. The following potential environmental and health and safety impacts were analyzed:

- Environmental, health and safety management systems;
- Vessel safety and pollution control; and
- Employee health and safety.

CTI has presented plans to address these impacts to ensure that the proposed project will, upon implementation of specific agreed measures, comply with applicable environmental, health and safety (EHS) requirements, including: international maritime standards under SOLAS, MARPOL, the International Safety Management (ISM) code, and World Bank/IFC environmental and social policies.
Location of environmental documents In locally affected community
This ERS contains a summary of IFC’s review prepared for the project. Additional information can be obtained directly from the following contact:

Mr. Nawras S. Anfoka
CFO,CTI Group
Phone: +962 6 5685115
Fax: +962 6 5676939

Contacts

For Inquiries About the Project, Contact

Mr. Nawras S. Anfoka
CFO,CTI Group
Phone: +962 6 5685115
Fax: +962 6 5676939

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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