Chengdu Potassium Hydroxide/Carbonate Summary Of Project Information (SPI)        Project Name      China: Chengdu Potassium Hydroxide/Carbonate              Region     Asia         Sector         Project No   008506    Projected Board Date   June 26, 1998    Company Name   Chengdu Chemical Company, Ltd. (CCCL)    Technical Partner and/or Major Shareholders     	Chengdu Chemical Company, Ltd. is a joint stock company with a diversified shareholding structure. The state owns 35% of CCCL, individuals own 35% and legal entities own 30%.  The legal entities can be further categorized into 4 groups: (i) 5 listed companies own 16.8% of CCCL. Their weighted average state ownership is 27.4%; (ii) a cooperative (95% owned by CCCLs employees) holds 7.2% of CCCLs shares; (iii) CITIC, a state-owned financial institution owns 3.9% of CCCL; and (iv) other legal entities own the remaining 2.3% of CCCLs shares.  Each of them holds less than 0.2% of CCCL.     Project Cost Including Proposed IFC Investment     	The total project cost is US$29.7 million.  IFC''s proposed investment is US$3.2 million in the form of equity, an A loan of US$7.4 million, and a B loan of US$8.6 million.     Location of Project and Description of Site     The project is to (i) build an additional 12,000 tons per annum (tpa) potassium carbonate (K2CO3) production line, including a 10,000 tpa potassium hydroxide (KOH) line,  (KOH is an intermediate in the production of K2CO3); and (ii) increase production of KOH flake by 10,000 tpa. CCCL''s existing site has limited facility for the new production lines.  The project will be located at the Jianjiang Chemical Plant site in Jiuchi Town, Pengzhou City, a satellite city of Chengdu.  It is about 40 km north of Chengdu, and 35 km from the existing plant.  The site area covers 193,430 square meters, 27,100 of which are reserved for the potassium hydroxide/carbonate expansion project. This site is within an industrial estate and has good access roads, good water supply and proximity to railroad.  The area has been designated by the Provincial and Municipal Governments as the heavy industry zone within the great Chengdu City area.       Description of Company and Purpose of Project     	Chengdu Chemical Company, Ltd. (CCCL) is China''s leading manufacturer of potassium based chemicals, located in Chengdu, Sichuan Province.  Currently the Company produces 17,000 tpa of KOH from two production lines, of which 10,000 tons are used internally to produce 12,000 tons of K2CO3. The Company also produces 10,000 tpa of caustic soda (NaOH).  A new line of 10,000 tpa high purity KOH flake, using the same membrane cell electrolysis technology as the existing lines, has just been constructed, started production in April 1998, and is expected to be in commercial operation in July 1998.    	The Project will improve CCCL''s competitiveness and help it maintain its market leadership through (a) expanding production capacity to allow CCCL to further improve its economies of scale and meet the increasing demand of K2CO3; (b) adding high purity KOH flake (which has been provided by imports up to now) to its product slate to make CCCL the first, and presently, the only hgih purity KOH flake producer in China. The demand for KOH flake is expanding in the Chinese household chemicals, textile, dye, and food industries, and the product offers attractive margins. In addition, the project contributes to import substitution, both for raw material and end products, and it promotes sector development in two interior Chinese regions: Sichuan where the Project is located and Qinghai where raw materials are sourced.     Environmental Category and Issues     	This is a category B project according to IFCs environmental review procedure.  Environmental, occupational health, and safety issues associated with this Project include: site suitability, air emissions, wastewater treatment, solid waste handling, and process plant safety.  The site is located within an industrial area.  Air emissions are limited due to efficient absorption of off-gasses, and import of power instead of own production.  Wastewater is treated on-site and solid waste is delivered to other companies for recycling.  The plant will have automatic gas release monitoring and alarms.  The Project has received necessary approvals from Chinese environmental authorities.     The  is  from the Infoshop.       Date SPI sent to Infoshop     May 15, 1998      This Summary of Project Information is prepared and distributed to the public in advance of consideration of the proposed transaction by the Corporations Board of Directors.  It is provided for the purpose of enhancing the transparency of IFCs activities and should not be construed as presuming the outcome of IFC Board consideration.    For Additional Information contact:  Corporate Relations Unit -   telephone: (202) 473-7711   facsimile: (202) 974-4384   Environmental documents for this project are available at http://www.ifc.org and from the World Bank InfoShop (http://www.worldbank.org/html/pic/aboutinfo.html).