Krupp Compa Arcuri Summary Of Project Information (SPI)       Project Name    Romania - Krupp Compa Arcuri              Region    Europe        Sector       Project No008932   Projected Board DateJune 18, 1998   Company NameKrupp Compa Arcuri S.A.   Technical Partner and/or Major Shareholders    	The major shareholder, and technical partner, with a 73% interest, is Krupp Hoesch Federn GmbH of Germany, a leading West European producer of suspension springs, including leaf springs, coil springs, stabilizer bars, and torsion bar springs for motor vehicles and related industries. Krupp Hoesch Federn GmbH is part of Krupp Hoesch Automotive and the wider Krupp Group of Companies.    	The other shareholder, with a 23% shareholding, is Compa S.A. of Sibiu, Romania, which manufactures a range of automotive components for supply to the Romanian automotive industry and the Romanian after market.  Until commencement of the joint venture operations on April 1, 1998, Compa S.A. was itself the major Romanian producer of leaf and coil springs.    Project Cost Including proposed IFC investment    	The total project cost is estimated at US$31 million equivalent, of which it is proposed that IFC provides up to US$14 million equivalent, including a "B" loan participation of about US$5 million equivalent.    Location of project and Description of site    	The Krupp Compa Arcuri joint venture is located within the main 280,000 square metre Compa S.A. factory complex in Sibiu, Romania.  The joint venture occupies approximately 27,400 square metres of land of which 17,842 square meters are owned by the joint venture and the remaining 9,918 square meters are rented from Compa S.A.    Description of Company and Purpose of Project   (include IFCs Role and Development Impact)    	Krupp Compa Arcuri S.A. is a joint stock company.  It was established on March 14, 1998 by Compa S.A. contributing its existing leaf spring production facilities, together with the plant and machinery associated with coil spring production, and Krupp Hoesch Federn GmbH contributing DM 6.3 million cash with a commitment to subscribe a further DM 14.6 million by no later than September 14, 1998.           The joint venture will become Krupp Hoesch Federn GmbH''s principal manufacturing source for parabolic and trapeziodal leaf springs for supply to the wider European market.  Krupp Hoesch Federn GmbH has recently experienced an erosion of its competitive position on the European leaf spring market.  In order to reduce its production cost and restore competitiveness, Krupp Hoesch Federn plans to close West European capacity, principally in the UK, and relocate its primary leaf springs production to Romania capitalizing on Compa''s highly skilled, low cost labor force. The project involves the modernization and expansion of the old Compa leaf spring production facility by means of purchase, refurbishment, relocation of proven technology equipment from the Krupp production facilities in UK, Germany and Portugal, and erection of a fully functional plant at the joint venture location. Customers will include Mercedes, Scania and Volvo, and leading trailer manufacturers  in Europe, and Roman (trucks), Aro (4*4), Dacia (cars) and the replacement market in Romania.                  The project has a strong developmental impact.  It delivers new technology, opens new export markets and provides new employment opportunities for Romania. IFC will provide long term finance which, despite an improving macro-economic environment, remains difficult to obtain in Romania without excessive collateral, including a parent company guaranttee.  IFC''s participation will support increased regional employment opportunities and promote increased export earnings.     Environmental Category and Issues    	This is an environmental review category B project.  Environmental, occupational health, and safety impacts of the project include air emissions, liquid effluents, solid and hazardous waste disposal, contaminated land from present or past operations, fire prevention and emergency response, and worker exposure to hazardous chemicals, fumes, noise and dust.    	 All new and refurbished equipment installed by the joint venture will comply with applicable Romanian and World Bank requirements. The new shot cleaning machine has a dust collection system, and the new quenching machine will have a closed cooling water circuit. Automatic fire extinguishing equipment will be integrated into the new quenching machine. Based on the results of analysis by the joint venture and the results of an environmental audit, environmental improvements to be conducted as part of the project include improvement of workplace air quality through modernization of ventilation systems, upgrades to quenching oil storage and handling systems, fire system upgrade for the existing quenching machine, measures to reduce noise at workplaces, and upgrades to fire protection and alarm systems.  The joint venture will also implement improvements in health and safety equipment and training programs.    The  is  from the Infoshop.       Date SPI sent to PIC     May 18, 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).