Metro Project Description of Company:    In 1999, the group established Metro Markets, the first Egyptian-owned chain of retail stores. During 1999 and 2000, Metro Markets expanded at a realistic pace, opening 17 operating outlets in Cairo and Alexandria.  All stores are designed following a corporate identity that encompasses fixtures, fittings, signage, layout and shelf stickers.  Individual product prices are identified by bar codes. Each store is pleasantly finished with false ceilings, tiled floors and wide aisles. It has a dedicated security staff (both uniformed and non-uniformed) that routinely keeps a close watch, and it is equipped with fire extinguishers.  The current strategy calls for further expansion in order to capture a larger share of the market, develop synergies with existing stores and achieve economies of scale, and contribute to the development of a formal retail sector in the country.      Purpose of Project:      The proposed IFC financing will be in the form of a corporate loan to Metro Markets to finance an investment program in the areas of supermarket retailing (ongoing expansion of Metro Market stores) and dairy foods and juice drinks (modernization of the Siclam plant and efficiency improvements).     Development Impact:    The proposed investment program is expected to have the following development impacts:     Supermarket retailing operations:           (i)    impact on the retail sector of the economy    : the projects investment in to the expansion of the first Egyptian owned supermarket chain will be an added support to the rapidly growing retail sector and services as a whole.  The project will also help strengthen the retail distribution network in Egypt; (ii)    impact on consumers:    consumers will benefit from access to an organized retail supermarket with quality products at competitive prices; and (iii)    impact on suppliers   : the project will have several backward linkages within the economy-- as the supermarket chain develops, more goods will be sourced locally, which will help develop a local supply chain, especially within the agriculture and manufacturing industries.  Manufacturers will be encouraged to produce goods locally which will lead to improvements in the quality of products, as competition increases domestically and with foreign products.     Dairy and juice drinks operations:           (i)    Impacts on customers   :  consumers of dairy and juice products will benefit from the availability of well packaged, nutritious fresh milk produced, at a reasonable price, under strict guidelines of hygiene and food safety; (ii)    impacts on suppliers   : it is expected that with the establishment of a new plant, Siclams factory will be modernized to world standards. Hence, the availability of such modern, environmentally/hygienically friendly technology in Siclams dairy production will have a spillover effect on competitors and other suppliers of dairy and juice products in Egypt - i.e., environmental standards within the entire dairy industry can be expected to increase as Siclams competitors strive to produce outputs that comply with similar hygiene and food safety standards; (iii)    Impacts on farmers   :  fresh milk, used in the dairy production process of Siclam, will be collected from 4 centers to which smaller dairy farmers will bring their milk.  This will increase the access of small dairy farmers to an improved and more organized market for their milk, thereby raising overall family incomes.  Another benefit of the projects backward linkages to the micro-dairy farm sector will be the improvement of the quality and hygiene standards of milk produced by dairy farmers in Egypt.    IFC has a strong role to play in this project.  First, the provision of long-term financing, which is scarce in Egypt, to allow the company to finance its expansion and modernization programs.  Second, the project would support Egypts only formally-organized local chain of retail outlets (grocery stores) and would create the first private sector integrated dairy plant in the country, thereby contributing to the development of the local private sector. Third, the project would introduce higher environmental and hygiene standards including: appropriate food handling and packaging, suitable transport, storage and display facilities, and training of staff in hygiene and food safety.  It would also ensure a regular supply of consistent products hygienically produced and packaged.        Finally, the project will improve the welfare of remote rural areas by providing small farmers with a constant demand for raw milk and thus a stable source of income. The implementation of four new milk collection centers equipped with milk testing facilities will integrate the small farmers to urban areas and improve the quality of the milk collected.