PROJECT

Projects

Summary of Proposed Investment

Project Number

9619

Company Name

Mabati Rolling Mills Limited

Date SPI Disclosed

Aug 26, 1999

Country

Kenya

Industry

Manufacturing

Status

Completed

Sector

Coated Products

Department

Gbl Ind, Manufact, Agribus & Services

Environmental Category

B - Limited

Previous Events

Approved : Dec 2, 1999
Signed : Apr 7, 2000
Invested : Oct 23, 2000

Project Description

Summary Of Project Information (SPI)

Project NameKenya - Mabati Rolling Mills Limited,

RegionSub-Saharan Africa
Sector
Project No009619
Projected Board DateSeptember 27, 1999
Company NameMabati Rolling Mills Ltd.
Technical Partner and/or Major Shareholders

The Continuous Galvanising Line plant and equipment will be supplied by Kawasaki Heavy Industries Ltd of Japan, which will provide supervising services for erection and also provide technical assistance for operations. Technology transfer and technical assistance for Aluminium-Zinc Coating (Al-Zn) will be provided by BIEC International, a corporation incorporated in the United States of America.
The major shareholders of Mabati Rolling Mills Ltd. are: Costronal Holdings SA (49%); Clovis Company (45.6%); and Kenya Aluminium and Industrial Works Ltd. (KAIW) (5.4%).

Project Cost Including proposed IFC investment

Estimated Project Cost: US$30.4 million. Proposed IFC Investment: a Senior Loan (A loan) of US$7.0 million and a Subordinated Loan (C loan) of US$4 5 million.

Location of project and Description of site

The project will be located adjacent to the company''s Cold Rolling Mill (CRM) at Mariakani near Mombasa, Kenya. Mariakani is a small rural town situated about 40 km from Mombasa along the Mombasa-Nairobi road. It is within close proximity of the main Kenya railroad that runs to Uganda and is also close to the main Port of Mombasa.

Description of Company and Purpose of Project

Mabati Rolling Mills, the Company, currently has two operations i.e., a Cold Rolling Mill (CRM), which obtained ISO 9002 certification in 1998, and a small chemicals plant. The CRM produces a wide range of cold rolled steel to suit variety of individual applications. The chemical plant produces caustic soda, hydrochloric acid and sodium hypochlorite for Group companies and also for sale in the external market. The Company is one of the flagship companies of the Comcraft Group in Kenya. The Comcraft Group is a multinational group with wide interests in East Africa and in other African countries, as well as well-established operations in Asia and Europe. One of the Group''s companies in Kenya, Galsheet Kenya Ltd (Galsheet) operates two galvanizing lines (one each at Mombasa and Nairobi) and a color coating line.
The purpose of the project is to replace the two existing galvanizing lines of Galsheet with a single state-of-the-art unit at Mariakani near Mombasa. The technology chosen is a non-oxidizing furnace-type hot dip galvanizing and Al-Zn coating with an on-line annealing. The new plant will have the capacity to manufacture 80,000 tons per annum of highest quality galvanized and Al-Zn coated coils for the local market as well as for exports in the region. Hot rolled steel coils (mostly imported from Japan, Europe and South Africa) are processed by the Company''s in-house Cold Rolling Mill into cold rolled coils, which in turn will be used for the manufacturing of galvanized and Al-Zn coated coils. These coils will be partly used for producing color coated coils. The galvanized/Al-Zn/color coated coils will, after undergoing further processing into plain, corrugated and other profiles, be used mainly for industrial and residential roofing.
The project will: introduce new technology (Al-Zn coating) and products to the East African and neighboring market; provide benefits to consumers (e.g. for housing in lower income rural areas) of higher quality and longer lasting goods at comparable prices; provide further development of Mariakani and the adjoining areas as the industrial activity gets a boost with the new plant converting the existing operations into a mini-industrial complex; create indirect employment in the Mariakani and adjoining areas, as a result of the increased industrial activity; generate increased foreign exchange earnings by export diversification as sales to regional markets are realized; and provide an opportunity for local participation in the investment as the Company ultimately is listed.

 
Environmental Category and Issues

This project is a Category B project according to IFC’s environmental and social review procedures. Key issues related to this project include: impacts associated with past operations; air emissions; liquid effluent handling, treatment and discharge; hazardous materials handling and disposal; solid waste disposal; raw materials supply; water and power supply; emergency planning and response; and general health and safety issues.
At IFC''s request the sponsor completed an independent Environmental Audit of existing operations. This audit included identifications of necessary Corrective Action together with a timetable for implementation. Key corrective action measures and mitigation include improvement of safety and housekeeping measures, air emissions monitoring, emergency and safety planning, and waste management. Mabati are targeting ISO 14001 certification and their operations are currently ISO 9000 certified.

The is from the InfoShop.

Host country location of environmental documentsThe has been translated into Swahili and is available at the factory locations at Mariakani and Nairobi and also at Mabati’s city office at Mombasa. Availability of these is made known by a notice outside these premises.

Date SPI sent to InfoShop August 26, 1999     
“This Summary of Project Information is prepared and distributed to the public in advance of consideration of the proposed transaction by the Corporation’s Board of Directors. It is provided for the purpose of enhancing the transparency of IFC’s activities and should not be construed as presuming the outcome of IFC Board consideration.”

For Additional Information contact: Corporate Relations Unit -
telephone: (202) 473-7711
facsimile: (202) 974-4384
Environmental documents for this project are available at http://www.ifc.org and from the World Bank InfoShop (http://www.worldbank.org/html/pic/aboutinfo.html).

Sponsor / Cost / Location