Brisa Tyres

Location:

Turkey

Project number:

46849

Business sector:

Manufacturing and Services

Notice type:

Private

Environmental category:

B

Approval date:

20 Jul 2016

Status:

Repaying

PSD disclosed:

21 Jul 2016

Translated version of this PSD: Turkish

Project Description

The EBRD is considering a long-term loan to Brisa Bridgestone Sabanci Lastik Sanayi ve Ticaret A.i. (the "Company") of up to USD 150 million to finance the construction of a new tyre plant in Aksaray, Central Anatolia. The loan will also contribute to the acquisition of additional equipment for the Company's existing plant located in Izmit, a city in north-western Anatolia, Turkey.

Project Objectives

The Project envisages that the new Aksaray plant will have an annual production capacity of almost 4.2 million tires for passenger cars and light commercial vehicles. The Izmit plant will increase its capacity for the truck and bus segment.

Transition Impact

The Project is expected to achieve a strong transition impact in Turkey, particularly through transfer and dispersion of skills and setting standards for corporate governance and business conduct in relation to regional, youth and gender inclusion. The project will also contribute towards the Bank's ongoing inclusion policy dialogue initiative in Turkey that creates direct links between the private sector and Turkish education authorities to improve skills standards in line with employers' needs.

Client Information

BRISA BRIDGESTONE SABANCI LASTIK SANAYI VE TICARET AS

Brisa Bridgestone Sabanci Lastik Sanayi ve Ticaret A.i. is incorporated in Turkey for the manufacturing, marketing and selling of tyres and rubber products. The Company operates as a joint
venture between Bridgestone Corporation and Haci Omer Sabanci Holding A.i. each holding 43.63% equity stake. The Company is listed on Borsa Istanbul with a circa 10% free float.

EBRD Finance Summary

USD 150,000,000.00

Up to USD 150 million long-term A loan for the EBRD's account.

Total Project Cost

USD 330,000,000.00

Environmental and Social Summary

Categorised B (2014 ESP). The environmental and social impacts associated with the construction and operation of a tyre plant can be readily identified and addressed with standard mitigation measures. Due diligence has been undertaken with the assistance of independent consultants who have carried out an audit of the Brisa's Izmit plant, including a review of corporate policies and procedures, and an appraisal of the new facility in Aksaray. The consultants have prepared a Non-Technical Summary for the project, an Environmental and Social Action Plan (ESAP) and a Stakeholder Engagement Plan (SEP).

Brisa has ISO 14001 and OHSAS 18001 certified environmental and safety management systems for the Izmit plant, and is implementing environmental requirements substantially in line with EBRD performance requirements (PR) and the Turkish law. There are no problems identified with labour issues at this Company. 77% of employees belong to the trade union and a collective bargaining agreement and functioning grievance mechanism are in place.

Construction is currently underway at the Aksaray site and is being carried out by a main contractor and 17 sub-contractors. The site is located in an industrial zone and is 700m from the nearest residential area. An Environmental Impact Assessment has been prepared and environmental and safety requirements are specified in the construction contract. The contractors have a health and safety management system in place, which includes tracking and reporting near misses. Issues identified at the site relate to 'house-keeping' issues and waste management will be addressed in the ESAP. EBRD will monitor the implementation and operation of the project through review of the client's annual environmental and social report.

Technical Cooperation

Technical Cooperation funds from the Inclusion TC Framework provided by the Bank's Shareholder Special Fund will be used to support economic inclusion via improved transition from training into employment for young people (including blue-collar workers) in the tyre sector and in the region surrounding Aksaray. Up to EUR 70,000 will be used for the development and implementation of an action plan to support the Company in addressing key challenges in relation to the recruitment of entry level staff, career guidance, and the training and career progression of its workforce.

Company Contact Information

Resat Oruc
brisa.info@brisa.com.tr
+902123858450
+902123858455
www.brisa.com.tr
Sabanci Center Kule 2 Kat: 8 4. Levent 34330 ISTANBUL

Business opportunities

For business opportunities or procurement, contact the client company.

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Please visit the Project Complaint Mechanism page to find information about how to submit a complaint. The PCM Officer (pcm@ebrd.com) is available to answer any questions you may have regarding the submission of a complaint and criteria for registration and eligibility, in accordance with the PCM Rules of Procedure.