DISCLAIMER
This Environmental Review Summary is prepared and distributed in advance of the IFC Board of Directors' consideration of the proposed transaction. Its purpose is to enhance the transparency of IFC's activities, and this document should not be construed as presuming the outcome of the Board of Director's decision. Board dates are estimates only.
Any documentation which is attached to this Environmental Review Summary has been prepared by the project sponsor and authorization has been given for public release. IFC has reviewed this documentation and considers that it is of adequate quality to be released to the public but does not endorse the content.
 
   
Project Identification
Country Project Name Project No.
India Ruchi Soya 21652
     
Region Environmental Category
ASIA B - Limited
     
Dept. / Div. Company Name
CAGDR - Agribusiness/Agribusiness Department Ruchi Soya (516777)
Project Business Sector : F - AC - Vegetable Fats and Oils Project Status : Active
 
Parent Project Identification :
 
Parent ID :
Parent Short Name :
Parent Relationship : No Relationship
 
Document Status :
 
Date Sent For Approval
Date ERS sent to Infoshop
Local Disclosure Date
Date Revised ERS sent ot Infoshop
Local Disclosure Date of revised ERS
 
Project Description :
 
Ruchi Soya Industries Ltd (RSIL) is the largest edible oil company in India engaged in refining and trading of edible oils, soybean oil extraction, and export of soybean meal. The Company envisages an investment program spread over two years that includes the following components. Construction of greenfield 700 tons per day (TPD) oil refinery and a 2oo TPD hydrogenation plant at Patalganga and a 1000 TPD soy bean crushing and 200 TPD oil refinery at Butibori ~30 Km from Nagpur in Maharashtra; modernization and upgrading of existing manufacturing facilities, purchase of new capital equipment for selected installations, provision of working capital, and acquisition of other, existing operations.
 
Environmental Category B Disclosure Requirements :
 
IFC requires that this document is made available through the World Bank InfoShop and to the locally affected community no less than 30 days prior to project consideration by the IFC Board of Directors.

The Summary of Project Information (SPI) also provides details of where the Environmental Review Summary (ERS) has been made available to the locally affected community. The SPI must be sent to World Bank InfoShop no less than 30 days prior to project consideration by the IFC Board of Directors

 
Environmental and Social Issues :
 
This is a Category B project according to IFC's Procedure for Environmental and Social Review of Projects because a limited number of specific environmental and social impacts may result that can be avoided or mitigated by adhering to generally recognized performance standards, guidelines or design criteria. The review of this project consisted of a field visit to existing refining and crushing operations in Indore, Mangalore, Chennai, and the proposed site at Patalganga; and a detailed evaluation of technical, environmental, and social information submitted by the project sponsor. The following potential environment, health and safety and social impacts of the projects were analyzed.
   
1.
Environmental compliance at each operating facility including materials management and emissions to the environment;
   
2.
occupational health and safety;
   
3.
systematc management of quality, food safety and environmental affairs; and
   
4.
Compliance assessment and correction of compliance shortcomings in future acquisitions.
 
Praposed Mitogation for Environmental and Social Issues :
 
The sponsor has presented plans to address these impacts to ensure that the proposed project will upon implementation of the specific agreed measures, comply with environmental and social requirements, host country laws and regulations and the World Bank/IFC environment and social policies and environmental, health and safety guidelines. The information about how these potential impacts will be addressed by the sponsor is summarized in the paragraphs that follow. Further information is provided in the attached Corrective Action Plan (CAP).
 
1.
New Mumbai Port area (Patalganga) Refinery
 
Ruchi Soya purchased the 55 acre site required for the new refinery at Patalganga Industrial Complex, which is a designated industrial area for industries in the vicinity of the Jawaharlal Nehru Port Terminal, from private owners in a willing buyer, willing seller relationship. As the newest refinery this facility will be highly automated and incorporate all modern equipment. The Maharastra Pollution Control Board (MPCB) has granted authority to construct the operation and when the completed facility demonstrates that it has been built as designed, the MPCB will provide authority to operate. Water supply for the refinery includes on site ground water wells and the Patalganga River. These sources will be supplemented by rainwater collection during the monsoon season (June-September). Raw water will be dematerialized and disinfected for internal uses. Electrical power will be supplied by partially from the Maharastra State Electricity Board grid and partially by a captive cogeneration plant on site. The cogeneration plant will supply steam and power and burn low ash Indonesian coal in a fluidized bed combustor. The facility can also burn higher ash content Indian coal. Emissions from the boiler will comply with Maharastra Pollution Control Board (MPCB) regulatory and IFC guideline air emissions limits. Process and sanitary wastewater from on site operations will be pretreated and then discharged to the Patalganga Rasainy Industries Association (PRIA) common effluent treatment plant. Effluent from the treatment works will comply with MPCB wastewater discharge limits for discharge to surface waters. Solid wastes from refinery operations include 250 metric tons of coal ash, 700 metric tons of bentonite filtering medium (bleaching earth), oil sludge and spent nickel catalyst. Coal ash will be sold for brick manufacturing and used for land fill; spent bleaching earth is to be sold to brick manufacturers as fuel for kilns, spent nickel catalyst will be sold to recycling agencies, and oil sludge will be sold as a raw material for soap manufacturing. The facility has been designed and will be constructed and operated with the objective of achieving Hazard Analysis and Critical Control Point (HACCP) certification.
 
2.
New Soyabean Crushing and Oil Refining Facility at Nagpur
 
Ruchi Soya purchased the 40 acre site, which was formerly used for agriculture, from private owners in a willing buyer, willing seller relationship. This refinery will also be highly automated and incorporate all modern equipment. The Maharastra Pollution Control Board (MPCB) has granted authority to construct the operation and when the completed facility demonstrates that it has been built as designed, the MPCB will provide authority to operate. Water supply for the refinery will be provided by ground water wells and treated in on-site demineralization and reverse osmosis plants. Electrical power will be supplied by partially from the Maharastra State Electricity Board grid and partially by diesel engine driven electrical generators. Emissions from the boiler will comply with Maharastra Pollution Control Board (MPCB) regulatory and IFC guideline air emissions limits. Process and sanitary wastewater from on site operations will be treated in the on-site effluent treatment plant. Treated will be recycled and used for the boiler, general plant uses, and landscaping. Solid wastes from refinery operations include 20 metric tons/day of coal ash, 5 metric tons/day of bentonite filtering medium (bleaching earth), oil sludge and spent nickel catalyst. Coal ash will be sold for brick manufacturing and used for land fill; spent bleaching earth is to be sold to brick manufacturers as fuel for kilns, spent nickel catalyst will be sold to recycling agencies, and oil sludge will be sold as raw materials for soap and brick manufacturing operations. The facility has also been designed and will be constructed and operated with the objective of achieving Hazard Analysis and Critical Control Point (HACCP) certification.
 
3.
Manglore Refinery
 
. Ruchi Soya's refinery at Mangalore has been in operation for roughly one year. The 20 acre site was purchased from an agency of Karnataka state government in a willing buyer, willing seller transaction. The Mangalore plant incorporates newer generation equipment. The facility was designed and built to ease some of the operations and process flow difficulties in the Chennai plant and to take advantage of accumulated plant design knowledge. The Karnataka Pollution Control Board (MPCB) has granted authority to construct and to operate based upon demonstrated operation of the facility in accordance with the approved design. Raw water is supplied by on site ground water wells and the municipality and these sources are treated and dematerialized on site for internal uses. Electric power is self-generated by diesel engine-driven generators. Air emissions from the generators comply with IFC guideline limits. A coal fired boiler generates steam. The fluidized bed combustor allows greater process control for combustion of low calorific value, high ash Indian coal. The unit currently complies with NO2 and SO2 limits of the Tanakata Pollution Control Board (PCB) and with IFC guideline limits. Particulate emissions are slightly higher than IFC limits. Thus, the fluidized bed combustor will be adjusted to bring particulate emissions into compliance with IFC guideline limits. Wastewater is collected and treated in a batch process then utilized for in plant and landscape watering purposes with no surface water discharge. Occupational health and safety, quality and environmental policies are written and there is an occupational health and safety manager assigned. Container labeling for hazardous materials (e.g. acids) in smaller quantities will be improved to comply with IFC guidelines. Solid wastes consist of coal ash, clay filtering media, oil sludge, and nickel catalyst. Ash, bentonite filtrates and oil sludge are sold to brick manufacturers. Nickel catalyst is sold to recyclers.
 
4.
Chennai Refinery
 
The operating facility at Chennai is, after Indore, the oldest of the Ruchi refineries. It has obtained and maintained permits to establish and to operate the project from the Tamil Nadu Pollution Control Board (TNPCB) and other requisite permits. Water is supplied from on site ground water wells and demineralized and softened for internal purposes. The refinery depends upon the electrical grid for its energy and only operates generators when needed because of power outages. A coal and rice hull fired boiler provides heat and process steam for the operation. Air emissions from the boiler comply with TNPCB and IFC guidelines for NO2 and SO2. Particulate emissions from coal-fired boilers comply with Tamil Nadu pollution control board (TNPCB) limits on particulate of <150 mg/Nm3 however exceed IFC guideline limits. Combustors must be adjusted to bring the facility into compliance with IFC guideline limits. The wastewater treatment plant adequately treats facility wastewater. A reverse osmosis unit is under construction that will further refine treated effluent and then the facility will recycle it for the boiler and other non-food uses. This installation has come about in response to water shortages. Housekeeping and the management of solid waste need improvement. Solid wastes are the same that are generated at other refineries but are collectively placed into an accumulation area without obvious organization for removal and sale of byproducts. Collected wastes will be stored in containers for removal for offsite uses. Operations areas will benefit from a spilled oil cleanup program and institution of efforts to prevent spills and to eradicate the potential for associated accidents. Occupational health needs attention as accident prone areas exist in several working areas (e.g. unprotected openings in the floors with no railings, slippery floors due to oil spills, etc.). Additionally, continuous cleaning to remove accumulated oil in all areas is needed.
 
5.
Indore Crusher and Refinery
 
The original plant facilities were established in 1992 then expanded in 1995 and 2002. Current operations include solvent extraction, oil refining, production of edible oils and fats, and byproducts including lecithin and acid oil. The property was obtained from a private owner in a willing buyer, willing seller relationship. The Madhya Pradesh Pollution Control Board (MPPCB) grants authority to operate the facility based upon the facility's demonstrated compliance with permit conditions and in accordance with the approved design. Water supply is provided by a group of 10 ground water wells. Raw water is treated by reverse osmosis for the steam boiler and demineralized for other purposes. High ash Indian coal is combusted for heat and steam and all boilers and stacks will discharge to an electrostatic precipitator (ESP) unit that is under construction and will be commissioned in April 2004. The ESP will eliminate current high particulate levels in air emissions. Other air emissions comply with MPPCB regulatory and IFC guideline limits. Process effluent is treated in a wastewater plant and treated effluent is utilized in land application for a plantation of poplar trees. Existing plans include construction of an RO facility for further treatment of wastewater treatment plant effluent to make boiler and cooling tower water and thus reduce pressure on the ground water aquifers. The facility uses electric grid power but is evaluating a cogeneration project for the future that could be as high as 4MW. Solid wastes including coal ash, filtering media and others typical of wastes generated at other refineries are stored in hoppers for collection and transport offsite by brick makers, soap manufacturers, and recyclers. The facility will benefit from improved housekeeping, HACCP certification for final product packaging and improvements in hazardous materials storage, transfer and utilization.
 
6.
Occupational Health and Safety
 
All existing refineries have obtained and maintain licenses to operate the refineries from the Industrial Health and Safety Department of the respective state government. The new installations at Patalganga and Nagpur will also obtain this license prior to commencing operations. The Indore engineering management department provides guidance to and inspections of the other facilities as well as input training programs and other administrative activities and systems. However, on-site inspections in all of the operations show that unsafe operating environments, lapses in physical security to prevent accidents, a general need for improved cleanliness and housekeeping (especially in the cleanup of oil residues and oil spills), and waste management practices need improvement. Ruchi will conduct occupational health and safety audits of existing operations to identify the gaps between the requirements of a systematic occupational health and safety program as defined in IFC guideline and existing operations. Identified shortcomings in implementation of systematic management, site management, employee awareness and training will be identified and rectified in accordance with the attached corrective action plan
 
7.
Systematic Management of Quality, Food Safety and environmental affairs.
 
Ruchi has a number of distributed systems and management mandated activities in place that are used to assure quality, consistency, food safety, and environmental compliance in manufacturing operations. It has conducted a number of needs assessments to define the steps that are required to achieve a more consistent, systematic approach in management and quality assurance. The current size of edible oils and associated food manufacturing operations is such that systematic management is required and will benefit the company. Accordingly, as described in the attached corrective action plan, the company will perform needs assessments and take the steps required to implement certifiable management systems.
 
8.
Assessement and Correction of Compliance Short Comings in future acquisition.
 
 
Ruchi will prepare an acquisition check-list and corrective action report format to be used to assess management practices in quality, occupational health and safety, food safety systems and practices (e.g. HACCP orientation and processing) in food product packaging, facility cleaning, and waste management and discharges to the environment (air, water, storm water) for target acquisitions. The format will be used to describe existing conditions and proposed remedial measures for acquisition targets and will be submitted to IFC for evaluation and comment.
 
Conclusion :
 
IFC concludes that the proposed project will meet the applicable World Bank/IFC environment and social policies and the environmental, health and safety guidelines upon successful implementation of the agreed mitigation measures described in detail in this ERS and in the attached Corrective Action Plan (CAP).
 
Monitoring and Compliance :
 
IFC will evaluate the project's compliance with the applicable environmental and social requirements during the lifetime of the project by reviewing the annual monitoring reports (AMRs) prepared for the project covering: the status of implementation of any measures contained in the Corrective Action Plan (CAP) and ongoing performance of project-specific environmental, health and safety and social activities as reflected in the results of periodic and quantitative sampling and measuring programs. Periodic site supervision visits will also be conducted.
 
Environmental and Social Documentation :
 
The attached Corrective Action Plan provides further details of environmental and/or social issues and required corrective and mitigation measures.
 
 
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