Sanko Group (the Sponsor or the Group) is a diversified Turkish conglomerate comprising of 33 companies, most of which are fully owned by the reputable Konukoğlu family who has been in the textile business for more than 100 years. In the 1990s, the Group started to diversify into other sectors, including construction (cement), packaging, beverage and automotive. Currently, one of the Group’s subsidiaries, Sanko Pazarlama (the textile marketing arm), has 25% of its shares listed on the Istanbul Stock Exchange.

The total project cost is estimated at $306.5 million. The proposed IFC investment consists of an A Loan of up to $75 million and a B Loan of up to $100 million to Çimko. The balance of the project cost will be financed by equity and internal cash generation.

75.0 million (USD)

Product Line	IFC Investment (million USD)
Risk Management
Guarantee
Loan	75.0
Equity

* These investment figures are indicative

The newly acquired cement plant is located in Bartin in the Black Sea region, while the new greenfield plant is located in Kahram Maras , a relatively undeveloped part of the South East Anatolia region in Turkey. Cimko’s other existing plant is in Adiyaman, which is also in the South East Anatolia region.

The project will have three primary impacts:

- support the ongoing modernization and privatization process of the Turkish cement industry;
- assist a major employer in the South East Anatolia region to diversify from its traditional textile business and to continue providing employment opportunities and other benefits, such as in education and health, to the community in this region; and
- support investments, particularly in Kahraman Maras, a less developed part of the country, which will benefit from the creation of much needed jobs and increased economic activity.

IFC’s role in this project is to:

- support a leading private group in its growth and diversification strategy by providing long term financing which is not readily available locally and more suited for such large investments;
- provide industry expertise and strategic advice on how to integrate newly acquired cement plants with the Group’s existing cement facility in order to maximize synergy;
share its expertise and experience in the textile industry which remain a core business of Sanko Group and which is facing increasing global competition;
assist the Group to upgrade its cement plants and bring them in compliance with IFC’s environmental policies; and
- support a group, which has a sound corporate social responsibility approach.

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, health and safety, as well as social and community information submitted by the Sponsor;
- site visits to the proposed site for the greenfield plant at Kahraman Maras; and
- site visits to the Bartin and Adiyaman cement plants.

The following potential impacts of the project were analyzed:

- The compliance of Çimko’s three cement plants as well as their associated facilities with Turkish and IFC environmental, health and safety (EHS) requirements;
- The commitment of Çimko to quality and efficiency and to high EHS performance including international certification; and
- Labor community and social issues.

The proposed mitigation approach to address the project’s impacts is detailed in the Environmental Review Summary, which has been disclosed to the public.
Location of environmental documents In locally affected community
Entrance gate of Adiyaman Cement Plant, Cimko Cimento ve Beton San. Tic, Borgenek Koyu Medvkii, Adiyaman;
Entrance gate of Bartin Cement Plant, Bartin Cimento Tic., Bartin; and
Sanko webpage (www.sanko.com.tr).