The company is 95% owned by Mr. Poddar, who owns an established trading operation in the US. The remaining 5% is owned by Mr. Poddar’s business partner, David Soans.

The total cost of the project is estimated at $90 million and is mostly attributed to land, building, machinery purchase, as well as working capital, and pre-operating expenses. The proposed IFC investment is $20 million for IFC’s own account.

20.0 million (USD)

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

* These investment figures are indicative

The project will be located in the Free Industrial Zone in Sadat City, Egypt, with good access to road and port facilities.

- Supporting the modernization of the textile section: The proposed project will contribute to Egypt’s effort in transitioning from a supplier of raw material to an international textile manufacturing center. The textile sector in Egypt is majority controlled by state owned companies which are poorly managed with outdated technologies. The project will transfer management expertise, technological know-how, and a proven quality control system to Egypt and help support the modernization of the sector. - Domestic value addition: Currently, Egypt exports the majority of its production of cotton. The project will add value to this raw material through further processing, thus increasing government tax revenue and contributing to export earnings for Egypt. In addition, the project will enhance the skills of the local workforce through training and management and technology transfer. - Employment generation: Egypt’s main economic challenge is to generate enough jobs to absorb its large and growing labor force. By creating around 2400 jobs in Menoufia, Egypt’s most populated governorate where the plant will be located, the project will help address Egypt’s unemployment problems, especially outside of the capital. - Setting environment and social standards: The project will help set high standard for environment, social, safety and labor practices in the country’s textile manufacturing industry in which these aspects in the global supply chain are increasingly scrutinized by the customers. Key development impacts of the project that will be tracked during supervision include the following: - Benefits to the local economy, to be measured by local purchases of raw materials, energy and other services; - Benefits to the employees, to be measured by the number of direct jobs created, wages, and training costs; - Modernization of the textile sector, to be measured by the transfer to new technology and production skills and techniques; - Setting environment and social standards, to be measured by compliance with the WBG Environment, Social, Health, and Safety standards. In addition, the following key financial and economic performance indicators will be tracked during supervision: - Financial performance: The company’s sales, net income, return on invested capital; and - Economic performance: Operating income, economic return on invested capital, and taxes paid to the government.

The sponsor views IFC as a unique partner in investing in emerging market for the following reasons: First, IFC’s industry expertise and extensive experience and knowledge in emerging markets, a rare combination often not available from other financial institutions, is of important value to the sponsor who is backward integrating into manufacturing in these markets. As the supply chain of the textile industry is increasingly globalized, the sponsor appreciates the global prospective brought about by the IFC sector team. Second, the sponsor is comforted by IFC’s presence in these markets to mitigate the political risks. In addition to the funding, IFC also advised on the technical and operational issues regarding project implementation.

The key environmental and social issues associated with this project are social and environmental assessment, management of social and environmental issues in operation, labor and working conditions, emissions to air and water, and efficient use of energy and water.

These issues are may all be readily mitigated by the application of readily available techniques and technology, are site specific and are reversible. This is therefore an environmental category B project.