DSCL is one of the four independent companies under the DCM Group. Delhi Cloth & General Mills Co. Ltd. (“DCM”) was founded in 1889 by the late Sir Shriram as a spinning mill in Delhi. Subsequently, it expanded and diversified into sugar, chemicals, engineering and food products. In 1990, the third generation of the Shriram family restructured the DCM group of companies into four independent companies, each held and managed by a separate branch of the family.

DSCL is owned by three Shriram brothers - Messrs. Ajay Shriram, Vikram Shriram and Ajit Shriram (the “Sponsors”), who have a 54.5% shareholding in DSCL. As a domestically listed company, the rest of its shares are held by the general public (12.7%), banks and financial institutions (13.5%), foreign institutional investors (4.2%), mutual funds (2.4%) and other corporates (12.6%).

The total project cost is estimated at $106 million. The Proposed IFC investment is a $15 million A loan from IFC’s own account.

DSCL is IFC’s existing client and IFC has committed $30 million investment in the Company for a project in chemical expansion.

15.0 million (USD)

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

* These investment figures are indicative

The two greenfield sugar mills and co-generations will be in rural areas of Hariawan and Loni, both in the District of Hardoi of UP. The expansion project is at the company’s exiting mill in the rural area of Ajbapur in the District of Lakhimpur of UP.

Development Impact:

The project will contribute to the expansion of sugar production capacity in India, which has now become a deficit market. With the project, DSCL will build two new sugar mills with a capacity in line with international standards, which will contribute to lowering unit production costs. Production increases will also contribute to the stabilization of domestic prices.

Outgrowers will be major beneficiaries of the project as they will supply the company with sugar cane at a high price set by the State. The project will also result in additional employment in mostly rural areas.

The government will benefit from additional income taxes as a result of the expansion of a profitable company. At the same time, there will be cost for the government since the project may be eligible to receive investment subsidies and subsidies on cane price for a number of years.

IFC’s role:

IFC’s role is to help DSCL, which is a medium-sized, locally owned company in a highly capital-intensive business, mobilize long-term capital in line with its business requirements and to promote sustainable growth of the Company in its diverse lines of business.

Long term funding: Currently the average maturity of DSCL’s term debt is about 4 years. IFC proposes to provide an A Loan with a maturity of ten years, considerably longer than what is currently available to DSCL in the domestic market. Therefore, DSCL sees the strengthening of its capital structure as a direct long-term benefit from IFC’s involvement.

Enhancing long-term sustainability: Over the years, DSCL has taken a number of steps to make its operations fully compliant with local environmental and social regulations as well as to start aligning them with international best practices. IFC’s involvement is part of the Company’s long-term strategy to ensure that its operations are upgraded to meet international best practice norms.

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, environmental and social information submitted by the project Sponsor; and visits to the Company’s sugar plants at Rupapur and Ajbapur as also the proposed new plant sites at Loni and Hariawan. The four locations are in Districts Hardoi (Rupapur, Loni and Hariawan) and Khiri Lakhimpur (Ajbabpur), Uttar Pradesh, India. The following potential environment, health and safety and social aspect of the project were analyzed:

- corporate environmental, social, and health and safety management systems;
- national and local government permitting requirements;
- land acquisition, compensation and physical and/or economic resettlement;
- community consultation and disclosure;
- sourcing of fiber; source of power and energy during construction and operation, including fuel storage if applicable;
- air emissions and noise during construction and operation;
- source and volumes of water consumed including efforts to minimize water use;
- recycling and treatment of process effluent and domestic waste water;
- community health and safety during both construction and operation;
- provision of housing, hygiene facilities, water, and power (including fuel storage) during construction and operation;
- hazardous materials management; minimization, recycling and disposal of solid and hazardous wastes during construction and operation;
- fire and life safety and emergency response;
- occupational health and safety during construction and operation;
- corporate social responsibility efforts, including HIV/AIDS awareness; and
- timely reporting on environmental and social performance to IFC.
Location of environmental documents In locally affected community
DSCL Sugar – Ajbapur
P.O. Mullapur,
Jang Bahadur Ganj,
Distt. Lakhimpur Kheri 261505, Uttar Pradesh, India
Telephone: 05875-243206/243295

DSCL Sugar – Rupapur
P.O. Munder,
Distt. Hardoi 241123, Uttar Pradesh, India
Telephone: 05853-264307/264308

DSCL Sugar – Hariawan
P.O. Hariawan,
Distt. Hardoi 241405, Uttar Pradesh, India
Telephone: 09935-096324

DSCL Sugar – Loni
P.O. Anjhi Shahbad,
Distt. Hardoi 201102, Uttar Pradesh, India
Telephone: 09935-096323