Sukhodol hot press stamping plant

Location:

Russia

Project number:

42031

Business sector:

Manufacturing and Services

Notice type:

Private

Environmental category:

B

Approval date:

07 Dec 2010

Status:

Complete

PSD disclosed:

05 Nov 2010

Translated version of this PSD: Russian

Project Description

EBRD is considering providing a corporate loan to Oil and Gas Systems (the “Company”) to finance the construction of a greenfield hot press stamping plant near the town of Sukhodol, Tula region, to secure own supply of half-body casings for the production of pipeline valves and to enter the growing market of large stamped parts used in various industries in Russia (the “Project)”.

Transition Impact

The proposed facility should assist Oil and Gas Systems in securing the financing with a tenor appropriate for a large-size greenfield investment. The Project will:

i) allow to keep the production of pipeline valves, critical security and control elements for the national pipeline infrastructure while improving their quality and environmental safety;

ii) improve vertical integration within the Company, significantly increase energy efficiency and reduce metal consumption as compared to outdated stamping process currently outsourced to the third parties;

iii) demonstrate new processes and innovative approaches for the stamping industry.

In addition, the proposed financing will facilitate enterprise restructuring and setting standards of business conduct including IFRS reporting and environmental and social standards.

The Client

Oil and Gas Systems, which owns and operates Tyazhpromarmatura plant, a leading Russian producer of pipeline valves, and Sukhodol Press Forging, a greenfield hot press stamping plant.

EBRD Finance

The EBRD will provide €90 million senior loan with up to €25 million to be syndicated to commercial banks.

DEG is expected to provide up to €15 million as a parallel loan.

Project Cost

The total financing will comprise approx €105 million

Environmental Impact

The project is Categorised B. The construction and operation of new state-of-the-art hot press stamping facility is associated with a limited number of potential environmental and social impacts, which are site-specific and readily identified and mitigated.

An Independent Consultant was retained to conduct Environmental and Social Due Diligence (ESDD) of the Project and the Company to assess the current environmental standing as well as ascertain the capacity of the firm to implement the Bank’s Performance Requirements (PRs).

The ESDD confirmed that the Company has the capacity to implement the Banks PRs and the site is not located in a sensitive location. The new facility will be designed to meet best international standards, and will include state-of-the-art environmental abatement equipment. Based on the ESDD an Environmental and Social Action Plan (ESAP) has been developed and is being agreed with the client, which will include commitments to meet best international standards and the Company will develop and implement an Environmental Health and Safety management systems, namely ISO 14001 and OHSAS 18001. The Project will be subject to a formal environmental permitting process as part of project design, and a local EIA (OVOS) will be developed for the project. This will include additional local consultations of the project.

The Bank will monitor the environmental permitting process for the plant.

Technical Cooperation

None.

Company Contact

Mrs. Irina Yumangulova, CFO, Oil and Gas Systems

E-mail: yumangulova@ogscomp.ru

Tel: +7 (495) 411 77 57

 

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

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Text of the PIP

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