The project sponsor, IIL was established in the 1948 as a trading operation and began its first steel pipe manufacturing operation in 1965. Until its listing in 1984, IIL was wholly owned by the Chinoy family. The Chinoy family retains a majority shareholding of 56%. The remainder of the shares is owned by the public with over 2,200 shareholders. National Investment Trust of Pakistan is the largest single shareholder among the public investors, with a 21% stake, and no other investor has more than 5% ownership in IIL.

At present, IIL is the largest and only integrated downstream manufacturer and distributor of galvanized and steel pipes with a manufacturing capacity of 300,000 tons. IIL is the market leader with over 30% market share in Pakistan.

IIL is listed on the Karachi, Islamabad and Lahore stock exchanges in Pakistan.

The total project cost is estimated at $162 million. The proposed IFC investment would be up to $18.4 million including a senior loan of up to $12 million and a convertible loan of up to $6.4 million.

18.40 million (USD)

Product Line	IFC Investment (million USD)
Risk Management
Guarantee
Loan	18.40
Equity	0.0

* These investment figures are indicative

The project site is located in Landhi, an industrial zone in the eastern part of Karachi, Pakistan. It is bordered by the Faisal Cantonment and Shah Faisal town to the north across the Malir River, Bin Qasim Town to the south and east, and Korangi Town to the west. The industrial zone benefits from the proximity of Port Qasim and Jinnah International Airport as well as railways and road link to the rest of Pakistan.

The project will have a strong development impact by locally supplying galvanized sheets that are currently imported, savings over $35 million annually of foreign exchange. Many houses in the coastal regions of Pakistan still use asbestos sheets for roofing, which represents health issues for the society, and which the project plans to replace with galvanized sheets. The project will benefit from the management expertise of a strong sponsor, who has significant technological know-how both in investment and production. It will also create direct job opportunities, for about 500 employees, who will benefit training schemes. Given the limited number of listed companies in Pakistan, the successful IPO of the project will help strengthen the domestic capital market.

IFC would be helping a successful company:

- meet the demand of low income groups for cheap roofing material;
- introduce modern technologies which would produce quality products at lower costs;
- invest in a capital program that meets World Bank Group and country standards through IFC’s participation and expertise
- benefit from IFC’s experience in investing in the same industry in other geographical areas as well as IFC’s contacts with successful players in the galvanized sheet roofing market.
- facilitate the successful funding of the project, including IPO given IFC’s presence in the project.

The project involves development of a single integrated Cold Rolled Coil and Galvanized Sheet plant in a heavily modified peri-urban mixed use (light industrial and some residential) area of Karachi. Key environmental, health and safety and social aspects of the project include:

- management of environmental, health and safety performance at current and planned operations;
- social and environmental assessment of the impacts of the project;
- compliance with the national and local permitting requirements, ability to engage with local communities;
- fair, safe and healthy working conditions in the operation of sponsor’s facilities and construction of the project;
- use of water and energy;
- air emissions from the process and from the power plant, including greenhouse gas emissions, solid waste and by-products management, process wastewater management; and
- noise;
- possible impacts on ambient water and air quality, including noise;
- effects of traffic and labor influx generated by the project;
- impacts associated with land acquisition; and
- possible impacts of construction on cultural heritage.

The approximately 32.4 acre site was formerly state land. The sponsor purchased the entire landholding from a single owner in 2007, on a willing-buyer, willing seller basis. The seller was given the land by the Military Estate in exchange for their land used by the government through the 1940s and ’50s. The transaction did not result in any physical or economic resettlement. Given the current land use of the site and surrounding area, no adverse impacts on environmentally sensitive areas or indigenous peoples are expected to occur. The nature of the project’s operations is such that it will be possible to readily design and implement engineering and management measures to mitigate any adverse impacts that result from the project. Moreover, in light of the fact that mitigation measures can readily be designed, adverse impacts are not expected to be diverse or irreversible and will be limited to project site, and no physical or economic displacement of communities occurred, the project has been classified as a Category B. Full details may be found in the Environmental and Social Review Summary, which is also available on IFC’s website.