AD-ZARYA

Location:

Ukraine

Project number:

2942

Business sector:

Manufacturing and Services

Notice type:

Private

Environmental category:

B

Target board date:

02 Dec 1997

Status:

Completed

PSD disclosed:

03 Nov 1997

Project Description

Investment to complete and commission AD-Zarya's world-class glass container production plant, 70 per cent of which has been built, and to rehabilitate and upgrade an adjacent smaller plant as an integral facility.

The project will establish the first world-class glass container production facility in Ukraine and will catalyse modernisation of the industry. The current inability of the industry to provide high-quality, competitively priced containers is a core impediment to the development of Ukraine's food processing and beverage industries.

Transition Impact

A world-class sponsor will invest technical capital and know-how, and will bring industry business skills to Ukraine. An energy-efficient and environmentally friendly glass production facility using modern technology will be established, operating according to competitive market principles. The project will have an impact on the transition through its demonstration effect, technology transfer and economic benefits.

The Client

The client and investee company is AD-Zarya, a Ukraine-incorporated, closed joint-stock company with foreign investment. The project sponsor is Consumers Packaging Inc. (CPI), a Canadian public joint-stock company and the world's third-largest glass container producer.

EBRD Finance

An equity investment of US$ 12.375 million (ECU 11.11 million), representing 37.5 per cent of the company's issued share capital of US$ 33.025 million (ECU 29.65 million).

Project Cost

US$ 48.821 million (ECU 43.83 million).

Environmental Impact

The project involves the modernisation of existing facilities and the completion of a new glass container production plant. It was screened as B/1, requiring an Environmental Analysis of the proposed development and an Environmental Audit of the existing facilities. Environmental due diligence was conducted, which led to the preparation of an Environmental Action Plan (EAP).

 

The modernisation which is planned as part of the project will bring operations in line with international industry standards, as applied by the sponsors in Canada. It will result in energy and water-efficient operations and raw material conservation. The project encourages the recycling of glass material as it includes provisions for the collection of broken glass bottles from major towns. In addition, the refurbishing of the basic infrastructure will bring about resource efficiency in terms of industrial and run-off water recycling and the utilisation of waste heat.

 

The due diligence did not identify any significant environmental liabilities. Some environmental issues were identified which will be addressed, partly by the modernisation programme and partly by the implementation of the EAP, which the company will adopt as part of the requirements of the Bank. Raised issues comprised: overall environmental management; workers' health and safety in relation to ambient air quality, heat and noise levels; housekeeping; hazardous material management and waste management. The EAP includes a series of measures to address the issues identified, most importantly a programme for improvement of housekeeping and plans for the upgrading of hazardous material storage units, for waste management and for environmental monitoring.

 

The company will be required to designate an environmental manager and to develop an environmental management system. Environmental covenants for this project also include compliance with applicable Ukrainian and EU standards for environment and health and safety, periodic reporting to the Bank on environment and health and safety, in particular on the implementation of the EAP, and immediate notification of any incident or accident with significant material damage or other environmental consequences.

Technical Cooperation

None

Company Contact

 

Business opportunities

For business opportunities or procurement, contact the client company.

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