EGIC Pipes

Location:

Egypt

Project number:

44586

Business sector:

Manufacturing and Services

Notice type:

Private

Environmental category:

B

Target board date:

29 May 2013

Status:

Completed

PSD disclosed:

15 Feb 2013

Project Description

The EBRD is considering providing a loan of up to US$ 25 million to the Egyptian German Company for Construction Industries (“EGIC”) to finance capacity expansion in Egypt.

Transition Impact

The transition impact of the project is primarily derived from setting standards for corporate governance and business conduct through:

  1. Corporate Governance (CG): EGIC will follow a Corporate Governance Action Plan (CGAP), which includes crucial aspects for the Company to achieve its target of becoming an international player in the market. The measures outlined in the CGAP clearly exceed the local standard for unlisted companies (the governance structure of the Company will be in line with international best practices), and they are expected to have a strong demonstration effect among industrial firms seeking to improve their standards and planning international expansion / IPOs.
  2. Environmental, Health & Safety (EHS): Through the Bank’s involvement (and EGIC’s confirmed commitment to the proposed and approved ESAP), the Company will set EHS standards that go beyond legal requirements in Egypt as well as what it is understood to be common practice, according to the Environment and Sustainability Department.
  3. Business Conduct: EGIC is striving to achieve operational restructuring through improvement of the management systems and increased production efficiency and cost effectiveness, which are expected to increase the Company’s competitiveness and value proposition in the local and international markets. The Company’s operational improvements will be perceived in the market and are expected to positively affect other industrial players. In particular, the significant operational improvements to which the Company is committing to via the Project include the introduction of a comprehensive accounting and management reporting system (SAP).

The Client

EGIC is a significant player in the Egyptian plastic pipe market; it manufactures sanitary pipes with a wide product range including polypropylene, PVC and polyethylene pipes for water supply, drainage and gas supply usages. The company’s production has been mainly targeting the domestic market, which is expected to change with the acquisition in Turkey that will open a large number of export markets to EGIC.

EBRD Finance

EBRD is considering providing a long-term secured senior loan of up to US$25 million.

Project Cost

Up to US$25 million.

Environmental Impact

Category B. Potential environmental and social issues and risks associated with this project will be assessed, such as land acquisition, construction and the safety of the manufacturing process and products.

Environmental and social appraisal will cover the two major components of this project, that is, the Egyptian expansion project and the acquisition of the Turkish company.

For the expansion project at 6th of October, due diligence will involve an audit of existing operations and an appraisal of the proposed expansion project. For the acquisition component, an environmental and social audit of the acquisition target company’s operations and EHSS management systems is required.

Technical Cooperation

None.

 

Business opportunities

For business opportunities or procurement, contact the client company.

For state-sector projects, visit EBRD Procurement: Tel: +44 20 7338 6794
Email: procurement@ebrd.com

General enquiries

EBRD project enquiries not related to procurement:
Tel: +44 20 7338 7168
Email: projectenquiries@ebrd.com

Public Information Policy (PIP)

The PIP sets out how the EBRD discloses information and consults with its stakeholders so as to promote better awareness and understanding of its strategies, policies and operations. Please visit the Public Information Policy page below to find out how to request a Public Sector Board Report.
Text of the PIP

Project Complaint Mechanism (PCM)

The Project Complaint Mechanism (PCM) is the EBRD's accountability mechanism. It provides an opportunity for an independent review of complaints from individuals and organisations concerning EBRD-financed projects which are alleged to have caused, or are likely to cause, environmental and/or social harm.

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.