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Summary of Proposed Investment
Summary of Proposed Investment
Summary of Proposed Investment
Gabon Fertilizer Company
SUMMARY OF PROPOSED INVESTMENT
This Summary of Investment Information (SII) is prepared by IFC to disclose a factual summary of the main elements of the potential investment. Its purpose is
to enhance the transparency of IFC’s activities. For any project documentation or data included or attached herein that has been prepared by the project
sponsor, authorization has been given for public release by the project sponsor. IFC considers that this SII is of adequate quality for release to the public, but
has not necessarily independently verified all of the project information therein.
It is distributed in advance of IFC Board of Directors’ consideration and may be periodically updated thereafter. Board dates are estimates only and this
document should not be construed as presuming the outcome of the Board Directors’ decision.
Project number 31629
Company name GABON FERTILIZER COMPANY SA
Country Gabon
Sector GDA Nitrogenous Fertilizer
Environmental category A Significant
Date SPI disclosed November 7, 2012
Projected board date February 11, 2013
Region SubSaharan Africa
Department Gbl Ind, Manufact, Agribus & Services
Date revised SPI disclosed November 13, 2012
Status Hold
Overview
Project description
The Gabon Fertiliser Company (“GFC”, “the Company”), a Joint Venture (JV) led by OLAM International (“Olam”) in partnership with Tata Chemicals
Limited (“TCL”) and the Government of Gabon (“GoG”), plans to develop an integrated AmmoniaUrea Fertiliser Plant (“the Project”). The proposed
fertiliser plant will comprise the following facilities:
Ammonia plant producing 2,200 metric tons per day (all ammonia will be converted to urea);
Urea plant capable of producing 3,850 metric tons per day (MTPD) of granular urea (1.3 million MTPA normal capacity, with the possibility of
producing up to 1.4 million MTPA);
Jetty for the export of granular urea;
a 56 km long water pipeline from the Ogooue river;
Offsite and onsite utility facilities to meet the plant’s requirements for electrical power, steam, water, air, etc.
Natural gas will be used to produce urea as well as provide the proposed plant with power and will be piped to the site. The final granular urea
product will be exported from the site via a conveyor belt to the jetty where it will be loaded onto ships.
Sponsor/Cost/Location
Project sponsor and major shareholders of project company
GFC is majorityowned by Olam International with minority stakes owned by the Government of Gabon and TCL.
Olam is a Singaporean based company established in 1989 specializing in the supply chain management of agricultural products and food
ingredients. It went public in 2005 on the Singapore stock exchange. TCL, part of the Tata Group, is a leading manufacturer of urea and phosphate
fertilizers in India. Listed on the Bombay stock exchange, TCL is the world’s second largest producer of soda ash with manufacturing facilities in Asia,
Europe, Africa and North America.
Total project cost and amount and nature of IFC's investment
Total Project Cost is estimated at US$1.52.0 billion and IFC has been approached for a US$150200 million senior loan.
Location of project and description of site
The Project will be located on an undeveloped site of the designated Free Trade Zone at Mandji Island. The Free Trade Zone is approximately 10 km
away from the city of Port Gentil, Gabon. Port Gentil is the provincial capital of the OgoouéMaritime Province on Gabon’s western coast and Gabon’s
second largest city.
Development Impact
Expected Development Impact
Once implemented, the Project is expected to have a significant development impact in Gabon:
Diversifying the country's economy based on oil production, which has been declining during the past 15 years;
Contributing to the development of the agriculture sector and unlocking its potential by taking advantage of favorable soil conditions and rainfall
patterns;
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patterns;
Helping maximize the use of a natural resource with proved reserves, which have been so far underdeveloped;
Supporting smallholders and large farmers to increase availability of a vital input required for food production. This will not only boost food
production but address the bottom of the pyramid by helping small farmers use fertilizer to increase their yields and hence incomes;
Providing the Government with revenues through dividend distribution, as the GoG will have a stake in the Company;
Generating employment and building local capacity through training and knowledge transfer; GFC's operations will absorb a significant part of the
unemployed population in the country; and
Creating linkages with some local industries, in turn benefiting employment. The Company will distribute its fertilizers via primary distributors who
sell to farmers. There is an opportunity to develop capacity at new emerging distributors.
IFC's Expected Role and Additionality
To date, IFC's direct investments in Gabon have been modest. Support to the GFC Project would lead to:
Facilitate an investment through support to two large agro/chemicals players which intend to export their knowhow and expertise to emerging
markets often characterized by difficult regulatory environments;
Develop a longterm partnership with Olam as GFC will be one of the pillars of Olam's strategic move from a pure trading company to a more
diversified integrated corporation;
Political risk mitigation: Several projects in SubSaharan Africa are in challenging countries and difficult political environments. This poses higher
perceived risks for investors. IFC's presence and financing will mitigate some of these risks in this large FDI into Gabon. IFC's presence will provide
comfort to other lenders needed to raise the required financing for this Project;
Longterm financing from IFC: This is a capital intensive cyclical industry which requires long tenor financing to allow the Project financial cushion
to mitigate the risks of cyclicality;
Countercyclical role: IFC's participation in this Project will allow it to play a countercyclical role providing funds to Olam and TCL during this
difficult period in which most leading global financial institutions are facing significant stress and uncertainty as a result of the sovereign debt crisis
in Europe and weak economic performance in Europe, USA and Japan;
Potential opportunities to provide subprojects with Advisory Services components; and
Help the joint venture implement global best practices in Environmental &Social (E&S) standards.
E&S Risks / Impacts and Mitigation
Environmental & Social Categorization Rationale
This is a Category A project according to IFC’s Environmental and Social Review Procedure. Although the Project is expected to bring economic
and social benefits it will be a source of significant, diverse and irreversible environmental and social impacts during the construction and
operational phases.
To view the environmental documents for this project, click here
Contacts
For inquiries about the project, contact:
For inquiries and comments about IFC, contact:
General IFC Inquiries
IFC Corporate Relations
2121 Pennsylvania Avenue, NW
Washington DC 20433
Telephone: 2024733800
Fax: 2029744384
E Mail: Webmaster
Local access of project documentation
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15/07/2016 Summary of Proposed Investment
For further information on the fertiliser plant project, GFC can be contacted through the following address:
Mr. Abdul Khader Kukkady
Project Head
Gabon Fertilizer Company
mailto:abdul.kukkady@olamnet.com
Ph: 00918754499208
Mr. V. Jayaramn
Site Head
Gabon Fertilizer Company
mailto:jayaraman.v@olamnet.com
Ph: 0024106007000
Supporting Documentation
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