The company’s majority shareholder is Mr. Feng Guangcheng, who started a small construction company as his first business in 1985 before establishing Zhejiang Glass. Originally Mr. Feng, together with his family members, owned 100% of the company. Subsequently, in 2001 the family shareholding was diluted to 69.2% as a result of an IPO in Hong Kong. The IPO, which raised $68 million equivalent, listed 178.713 million H shares or equivalent to 30.9% of the company’s share capital.

The total project cost is estimated at $218 million. IFC proposes to finance up to $93 million of the project cost.

75.02 million (USD)

Product Line	IFC Investment (million USD)
Risk Management
Guarantee
Loan	50.0
Equity	25.02

* These investment figures are indicative

All of the company’s glass manufacturing facilities are located in the county of Shaoxing in Zhejiang province. Shaoxing is about 35 kilometers from Hangzhou, Zhejiang’s capital city and approximately 180 kilometers southwest of Shanghai. The company''s geographical position is convenient for transporting both raw materials to and finished product from the factory sites – as they are located in an industrial area, near the Hangzhou-Ningbo canal which links to the Ningbo port and is near several highways and national roads.

The company’s soda ash plant is located at the outskirts of the city of Delingha in the western province of Qinghai. Delingha is approximately 500 kilometers west of Xining, Qinghai’s capital. The area around Delingha is quite rural with the primary livelihood being herding. The area is also rich in salt and limestone, the main raw materials for soda ash production. The plant has a rail track which leads to the main railway network of the province, facilitating the transport of the finished soda ash to its customers in different parts of China.

The project will support Zhejiang Glass’ efforts to rationalize its balance sheet and return to financial health, so that it can continue to grow and become a leader in China’s glass industry. The Government is encouraging the glass industry to upgrade its technology and focus on high quality glass production, which is in-line with Zhejiang Glass’ strategy. This project is also consistent with the Government’s efforts by supporting a competitive local producer as it integrates upstream to better control its production cost with in-house soda ash. Finally, the company’s major investment in a soda ash plant in Qinghai – an interior province where investment opportunities are scarce - is generating more economic activity in a small town, Delingha. The plant is adding significant value to the province’s raw materials and is employing about 1,500 people, composed predominantly of locals. Additional indirect impacts include more revenues for small businesses, such as truck owners, which are benefiting from increased activity.

IFC’s role will be to provide long-term financing to Zhejiang Glass and support its efforts to rationalize its capital structure and reduce its overall financing risk. This will allow Zhejiang Glass to better weather any cyclical downturns in the future. In addition, IFC will work with the company to improve its practices in other areas such as environmental and social management and the development of an adequate insurance program.

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 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 as well as site visits to all the production facilities by IFC environmental and social specialists. The following potential environmental, health and safety and social impact of the projects were analyzed:

- Suitability of production plant locations with respect to sustainable raw material supply and infrastructure;
- The land acquisition procedures and compensation criteria used for all recent land take and the outcome of the land take;
- Process technologies used and their application with respect to raw material and energy consumption as well as air emission, waste water and solid waste management;
- Areas of potential environmental or social non compliance with IFC/World bank guidelines and policies, and remediation actions needed to correct any such non compliance; and
- Occupational health and safety practices, and analysis of accident statistics.

The findings of the appraisal process and the approach to mitigate any identified environmental or social impacts of the project are presented in detail in the Environmental Review Summary which will be disclosed to the public at the locations indicated below.