Universal Alloy Corporation

Location:

Romania

Project number:

41645

Business sector:

Manufacturing and Services

Notice type:

Private

Environmental category:

B

Target board date:

29 Sep 2010

Status:

Cancelled

PSD disclosed:

27 Aug 2010

Translated version of this PSD: Romanian

Project Description

The EBRD is considering providing €10 million equity finance to Universal Alloy Corporation Europe (“UACE”), a producer of aluminium components for the aerospace industry located in north western Romania. The total investment in this new facility is expected to be €42 million, out of which €28 million has already been contributed and deployed. The EBRD’s contribution will be to support the development of an integral cast billet facility attached to the extrusions presses and an aerospace machined parts manufacturing facility.

Transition Impact

The main transition impacts of this operation are the demonstration effects of new products and processes (higher value added); improved business standards; and the introduction of technological skills. It is expected that such knowledge will expand beyond one company to other aerospace companies based in Romania. The project could lead to further investments in Romania in higher value added manufacturing for the aircraft sector by demonstrating its benefits to other companies.

The Client

UACE is part of the Aerospace division of Swiss group Montana Tech Components AG (MTC) which also owns Universal Alloy Corporation in the United States (UAC US). UACE will benefit from the support of UAC US, the number two worldwide player in heavy and small and intermediate extruded components for the aircraft industry. MTC also has business lines in industrial components, special machinery for product identification in the metallurgical area and button cells and rechargeable and primary batteries for Original Equipment Manufacturers and retail customers.

EBRD Finance

The investment is €10 million equity finance to UACE. Additional finance for the project will come from the internally generated cash.

Project Cost

€42 million

Environmental Impact

Screening Category: A due diligence site visit by the Bank’s Environmental specialist confirmed that potential adverse environmental and social impacts associated with the project are site specific and readily identified, and can be addressed through mitigation measures. Accordingly, the Project has been screened as Category B.

UACE is developing robust management systems to address environmental and health & safety risk and the current management have strong capabilities in these areas based on their previous experience in North America. UACE has further agreed to develop stakeholder engagement mechanisms in line with the Bank’s Performance Requirements.

EBRD’s due diligence identified issues associated with wastewater disposal and minor issues associated with hazardous materials containment for which mitigation measures were identified and agreed with the company in an Environmental and Social Action Plan.

Technical Cooperation

None.

Company Contact

Dragos Ungurean, President

Universal Alloy Corporation Europe

244A Dumbravita, Maramures, Romania

Tel: +40-262-202306 Fax: +40-362-418988

Business opportunities

For business opportunities or procurement, contact the client company.

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Email: procurement@ebrd.com

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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.