25463 - Meghmani Finechem Limited

Who We Are
Who We Are

IFC is the largest global development institution focused on the private sector in developing countries. By encouraging growth, IFC advances economic development, creates jobs and improves the lives of people.
More About Us
About IFC

Our Leadership

Development Partners
Accountability

Learn more about accountability
Annual Report

Download the Report
What We Do
What We Do

IFC advances economic development and improves the lives of people by encouraging the growth of the private sector in developing countries. We achieve this by investing in impactful projects, mobilizing other investors, and sharing expertise.
What We Do Overview
SOLUTIONS

Our products and services
OUR PRIORITIES

Climate Business

Fragile & Conflict Afflicted Situations

Gender

Mobilizing Private Capital

Sustainability
SECTORS & EXPERTISE

Agribusiness & Forestry

Creative Industries

Education

Financial Institutions

Funds

Health

Infrastructure

Manufacturing

Public-Private Partnerships

Tourism, Retail & Property

Trade & Supply Chain Finance

Venture Capital

Working Upstream
Where We Work
Where We Work

As the largest global development institution focused on the private sector, IFC operates in more than 100 countries around the globe. We apply lessons learned in one region to solve problems in another.
Overview
By Region

Africa

East Asia and Pacific

Europe

Latin America and the Caribbean

Middle East and Central Asia

South Asia
Our Impact
Our Impact

Our impact improves lives. IFC brings a clear set of advantages to the world’s most challenging markets. Including a history of innovation, a global mandate, and a determination to achieve measurable development impact.
Our Impact Overview
PRINCIPLES & MEASUREMENT

Impact Investing at IFC

Measuring and Monitoring (AIMM)

Evaluation

Sustainable Development Goals (SDGs)

Owned by 186 member countries and consistently rated AAA/Aaa. IFC aims to achieve our mission of promoting development by providing debt and equity to the private sector, through a range of benchmark and bespoke products.

For Partners

For Investors

Get in Touch

Summary of Proposed Investment

Project Number

25463

Company Name

MEGHMANI FINECHEM LIMITED

Date SPI Disclosed

Dec 4, 2007

Country

India

Industry

Manufacturing

Projected Board Date

Jan 8, 2008

Status

Completed

Sector

Alkalies and Chlorine

Department

Regional Industry - MAS Asia & Pac

Environmental Category

B - Limited

Previous Events

Approved : Feb 28, 2008
Signed : Mar 13, 2008
Invested : Mar 31, 2008

Project Description

Meghmani Organics Limited (MOL or the sponsor), a manufacturer of specialty chemicals in Gujarat, India has set up a new company - Meghmani Finechem Limited (MFL or the company), which will construct and operate a 110,000 tons per annum (tpa) chlor-alkali plant together with a 40MW captive power plant, both at a greenfield site at Dahej, Gujarat. The proposed project supports the efforts of MOL to improve its competitiveness by partial backward integration of its operations while using environment-friendly membrane cell technology. The chlor-alkali plant is expected to become operational in CY2009.

MOL views MFL as the vehicle for the future investments and growth which will build on MOL’s technical expertise and existing operations. After the project, which represents Phase I, is complete, the shareholders hope to move into Phase II, which would focus on downstream chlorine derivatives such as PVC, ECH, mono-chloro acetic acid, cyanuric chloride, aluminum chloride, calcium chloride, methyl chloride, hydrogen peroxide and others.

Sponsor / Cost / Location

Product Line	IFC Investment (million USD)
Risk Management
Guarantee
Loan	20.0
Equity	13.56

Development Impact

The project will help establish international standards of environmental and social performance for MFL’s facilities using the environmentally friendly membrane cells technology. The benefits can be expected to have a positive demonstration effect on its competitors, thus encouraging other Indian chemical companies to improve competitiveness in the global markets and at the same time adopt the modern technology and environment-friendly operating standards. In addition, the project is expected to have the following measurable developmental benefits:

- Once operational, the project is expected to create about 500 new jobs on permanent basis which would be available for locals. Indicator: number of jobs at the plant starting at 2010.

- During construction period, the project is expected to create 200 to 1000 temporary construction jobs depending on the construction phase. Indicator: number of construction workers employed 2009.

- The project generate downstream economic impact in the local economy as the company will planning to source its main feedstock (raw salt) from local producers, primarily SMEs, in Dahej area. Indicator: value of raw materials sourced from local producers.

Fit With World Bank Group Strategy:

The World Bank Group Country Assistance Strategy for India focuses on improving government effectiveness; investing in people and empowering communities; and promoting private sector-led growth through provision of adequate infrastructure, accelerating rural growth, and fostering a competitive economy. In its direct support to firms, IFC’s strategy it so invest in companies which are:

- developing new products and markets;
- restructuring and modernizing to become internationally competitive; and
- expanding and moving towards a regional or global presence.

In doing so IFC will focus on providing firms with long-term debt and equity which may not be available from domestic financial markets; and on adding value in the areas of global best practices, creating international partnerships, entering new markets, environmental and social sustainability and corporate governance. The proposed project is therefore consistent with the Bank Group’s strategy in India to support companies striving for establishing strong regional presence and moving towards environmentally friendly technologies.

IFC Role and Additionality:

IFC Role includes:

Supporting the growth of a local company: By investing in the project, IFC will be supporting a mid-tier Indian company to realize its growth potential and become more competitive in the global and regional markets, especially in the context of greater economic liberalization being pursued by the government of India.

Support strengthening the Environment, Health, Social and Safety practices: Based on its experience from several chlor-alkali related transactions, IFC is uniquely positioned to help MFL to develop the environment, health, social and safety management systems and practices at the new plant.

Long-term funding: IFC will be providing longer term financing (about 10 years) to MFL, which is not readily available locally for the project in order to match the debt profile and MFL’s capitalization with the company’s growth plans. Long tenor debt is also important for the company to be competitive in this capital intensive and cyclical industry.

IFC Additionality:

The project with a significant investment of $125 million will double the size of the sponsor’s assets. The project will be financed on a stand alone basis and therefore the amount and maturity of the financing as well as IFC’s equity contribution and stamp of approval will be crucial in helping the company to raise the required financing package. Going forward, implementation of Phase II will require further investments and credibility for MFL. IFC’s global presence and its extensive experience in the chemicals industry worldwide, including participation in several chlor-alkali projects, will guide the company through challenges and opportunities as it grows and expands in this competitive sector.

This is a Category B project according to IFC’s Environmental and Social Review procedures 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. Mitigation measures for the potential environmental and social impacts are identified and incorporated in the Environmental and Social Action Plan (ESAP).

Contacts

For Inquiries About the Project, Contact

Ms. Deval Soparkar
Meghmani House, Shree Nivas Society,
Paldi, Ahmedabad 380007
Gujarat, INDIA

Phone number: +91-79-26640668/669 (EXT: 2301)
Website URL: http://www.meghmani.com

For Inquiries and Comments About IFC, Contact

General IFC Inquiries
IFC Corporate Relations
2121 Pennsylvania Avenue, NW
Washington DC 20433
Telephone: 202-473-3800
Fax: 202-974-4384
E Mail: Webmaster

This Summary of Proposed Investment is prepared and distributed to the public in advance of the IFC Board of Directors' consideration of the proposed transaction. It is not an offer of shares to the public and is intended solely to enhance the transparency of IFC’s activities. 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 Policy on Disclosure of Information that went into effect April 30, 2006.

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.

Projects

Summary of Proposed Investment

Project Description

Sponsor / Cost / Location

Development Impact

Similar Projects

Contacts

Projects

Summary of Proposed Investment

Project Description

Sponsor / Cost / Location

Project Sponsor and Major Shareholders of Project Company

Total Project Cost and Amount and Nature of IFC's Investment

Board Approved IFC Investment

Location of Project and Description of Site

Development Impact

Anticipated Impact Measurement & Monitoring (AIMM) Assessment

IFC's Expected Development Contribution

Environmental and Social Issues - Category

Press-Release

Related ESRS/ERS

Similar Projects

Contacts

Disclaimer