PROJECT

Projects

Summary of Proposed Investment

Project Number

9722

Company Name

CEFAS S.A.

Date SPI Disclosed

Oct 29, 1999

Country

Argentina

Industry

Manufacturing

Status

Completed

Sector

Quarried Construction Materials (Including Asbestos, Crushed Stone Construction, Aggregates, Granite Block, Sand, etc.)

Department

Gbl Ind, Manufact, Agribus & Services

Environmental Category

B - Limited

Previous Events

Approved : Dec 17, 1999
Signed : Jun 21, 2000
Invested : Oct 4, 2000

Project Description

Summary Of Project Information (SPI)

Project NameArgentina - CEFAS S.A.

RegionLatin American and Caribbean
Sector
Project No009722
Projected Board DateDecember 6, 1999
Company NameCEFAS S.A.
Technical Partner and/or Major Shareholders

CEFAS is controlled by Petroquimica Comodoro Rivadavia S.A. (PCR), which owns 99.99% of the company. Petroquimica Comodoro Rivadavia S.A. was founded in 1973. It is owned by the Brandi family (57.67%), the Cavallo family (40.98%), the IIC (1.25%) and company employees (0.09%). PCR''s two main lines of business are: (a) exploration and production of oil and gas; and (b) manufacturing of construction materials (Portland cement and other quarried materials through CEFAS).

Project Cost Including proposed IFC investment

The total project cost is estimated at US$40.9 million. IFC is considering a US$10 million A loan and a US$5 million C loan, both for its own account.

Location of project and Description of site

The project consists of: (i) physical restructuring of production facilities at Capdeville, Quilpo, Dock Sud, La Preferida, Zapala and Decavo; (ii) increase of quarry reserves and modernization of lime production facilities at La Providencia; (iii) construction of a new lime production plant at San Juan; (iv) establishment of a new distribution facility at Alianza; (v) general upgrade of environmental standards at all plants; and (vi) short-term debt restructuring. 

Description of Company and Purpose of Project

CEFAS S.A. is a medium-sized Argentine manufacturer of construction materials, with projected 1999 sales of US$33 million and assets of US$46 million. The company was founded in 1994 (but started operations in October 1996) when the sponsor, Petroquimica Comodoro Rivadavia S.A., decided to enter the lime market through a well thought-out strategy of acquiring some of the leading lime brands. In order to keep the lime operations separate from its main line of business (cement and oil & gas), PCR decided to spin-off the lime activity and created CEFAS. Since it was not possible to buy exclusively the brand names, CEFAS was forced to acquire the old and uncompetitive plants that manufactured those brand names. The construction materials industry had been underinvested in for the last 20 years due to a recessive construction industry scenario and lack of financing options, especially for residential construction (i.e. mortgages). The construction sector is now poised for higher growth than the overall economy, thus increasing demand for CEFAS’ products. The firm''s goal is to exploit this opportunity by modernizing facilities, introducing new products and lowering costs. The implementation of the project is expected to strengthen CEFAS’ position in the marketplace by reducing production costs by 40% while increasing efficiency and productivity, acquiring reserves, developing new products and meeting national and World Bank environmental standards.
     
Environmental Category and Issues

This is a category B project according to IFC’s environmental review procedure. Environmental issues associated with the project include air emissions; liquid effluent treatment/disposal; solid wastes; and quarry reclamation. Health and safety issues include employee exposure to dust, high temperature and noise; and contingency and emergency response plans. The sites are not located near sensitive habitats and no resettlement will occur as a result of the project. During construction and operation, the sponsor will implement all needed actions to ensure that there will not be negative impacts.
The sponsor has presented plans to address these issues and demonstrated that the proposed project will comply with applicable local regulations and World Bank policies and guidelines. The measures proposed to address the project’s potential environmental impacts, for the existing operations, are being presented to CEFAS in a Corrective Action Plan (CAP) which includes the installation of air pollution control devices in all areas of dust generation; development and implementation of measures for the proper handling and disposal of liquid and solid residues; implementation of water reuse practices; and the development of quarry reclamation programs for all its current as well as abandoned quarries. For the new plant as well as its associated quarries, CEFAS will conduct an environmental impact assessment. A copy of this study will be submitted to IFC prior first disbursement
In addition, CEFAS will conform an environmental and health and safety corporate group and will develop a comprehensive environmental management system by which it will establish a detailed monitoring program, develop contingency plans, established occupational health and industrial safety programs, and employee training programs. CEFAS will annually submit to IFC a monitoring report to ensure ongoing environmental compliance during the life of the project. However, during the implementation of the CAP, CEFAS will submit biannual environmental reports informing IFC about the progress of the CAP.
Based on its review of available information regarding potential environmental impacts and proposed mitigation measures, IFC concludes that, by project completion, CEFAS’s operations will be in compliance with the relevant World Bank environmental, health and safety guidelines and policies and with the Argentinean environmental standards. IFC will monitor CEFAS’s ongoing compliance with World Bank policies and guidelines during the life of the project by evaluating environmental performance reports submitted annually to IFC by the sponsor and by conducting periodic site reviews during project supervision.

The is from the InfoShop.

Host country location of environmental documents1) Dock Sud: Esc. Pública N° 8 Carlos de la Pena - La Boca - Capital Federal.
2) Olavarría: Esc. Pública N° 28 Teniente Coronel Florencio Monteagudo - Paraje La Providencia.
3) Zapala: Esc. Provincial de Educación Técnica N° 11 - Zapala - Prov del Neuquén.
4) San Juan: Esc. Profesor Alejandro Mathus
Ruta Prov. 901, Cienaguitas, Dto. Sarmiento, Prov. de San Juan.
5) Quilpo: Instituto Provincial de Enseñanza Media Manuel Hidalgo. Canteras Quilpo, Dto. Cruz del Eje, Prov. de Córdoba.

Date SPI sent to InfoShop October 29, 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