Sorochinsk Edible Oil Plant

Location:

Russia

Project number:

43468

Business sector:

Agribusiness

Notice type:

Private

Environmental category:

B

Status:

Cancelled

PSD disclosed:

18 Jun 2012

Project Description

The EBRD is considering providing financing to Sorochinsky Maslo-Ekstraktsionny Zavod for the construction of a Greenfield sunflower seed crushing and refining plant in Sorochinsk. The plant is expected to come on stream by mid-2013 and will produce crude sunflower oil.

Transition Impact

The construction of the Greenfield plant will demonstrate best practices in construction, latest production technologies as well as operational management processes. Due to the increased capacity, the Borrower will increase the number of farmers it works with in the Orenburg and neighbouring regions. All suppliers will meet global quality and delivery standards.

The Client

The Borrower Sorochinsky Maslo-Ekstraktsionny Zavod is a subsidiary of the WND joint venture between Singapore-based Wilmar International Limited, Russia-based Nizhegorodsky Girovoi Kombinat (NMGK) and Singapore-based Delta Exports.

EBRD Finance

Long-term loan of RUB equivalent of USD 63 million to be partly syndicated to commercial banks.

Project Cost

USD 127 million.

Environmental Impact

The Project has been categorised B in accordance with the EBRD Environmental and Social Policy 2008. The environmental and social impacts associated with the Project activities will be site specific and readily mitigated.

Environmental and social due diligence (ESDD) has been undertaken by the Bank’s Environment and Sustainability Department and independent consultant and was focused on the new facility in Russia and based on a review of all available information, including review of WND Group corporate management systems, review of operations and practices within their existing facilities and interviews with the Company’s representatives.

The due diligence confirmed that the client's current operations are in compliance with Russian legislative requirements and the proposed project will not have any significant adverse environmental impacts or socio-economic impacts. The WND group is forward looking and introducing best practice cross the business, with a significant investment programme. The proposed new facility will allow the implementation of best practice and IPPC Best Available Technique (BAT).

The new facility will be required to comply with the EBRD's Performance Requirements. As part of this, an Environmental and Social Action Plan has been drafted including points on the implementation of a more formalised environmental management system, improvements of H&S practices, development of stakeholder engagement processes including grievance mechanism, adoption of banks requirements in relation to planned retrenchment activities. The ESAP will form part of the legal agreements with the EBRD and will be the subject of regular environmental and social reporting to the EBRD.

Due diligence process also assessed projects JV partner, Wimar International, Corporate Social Responsibility performance, considered in accordance with EBRD’s Environmental and Social Policy project's area of influence. Assessment concluded that the CSR department at Wilmar has a high standard of management capability and the work undertaken in the past 5 years is notable. In addition, Wilmar’s philosophy to be open and transparent and adopt / develop best practice across the oil palm production makes the company a leading player in the industry.

Company Contact

4, ul. Staroelevatorskaya,
Sorochinsk, Orenburgskaya oblast,
461902 Russia

 

Business opportunities

For business opportunities or procurement, contact the client company.

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