Nghi Son Cement Corporation (NSCC) Expansion Project The project is a $240 million expansion for an existing IFC client, Nghi Son Cement Company (NSCC or the company) to add:   - second cement production line with a capacity of 2.15 million tpy at the plant in Thanh Hoa province 230 km Southwest of Hanoi,  - a distribution terminal with a capacity of 0.5 million tpy in Khanh Hoa province (South Central coast, 450 km from Hi Chi Minh City), and  - a cement tanker with capacity of 14,500 deadweight tons. IFC proposes to provide an A Loan of up to $35 million and a B Loans of up to $33 million to support the Project.  The goal of the project is to help NSCC to:   - maintain its leading position in Vietnam by expanding its production capacity and distribution network,  - improve efficiency through economies of scale, and  - provide more high-quality cement to underserved areas.    The project will provide high-quality cement to support the growth of Vietnams infrastructure which is a critical component of the countrys development program, as well as to the commercial and residential construction sector.   NSCC is an IFC client to whom IFC provided a $30 million A loan ($5.8 million outstanding) and a $26.5 million B loan (fully repaid in 2006) for a $340 million 2.15 million tpy greenfield plant in 1998.  Since start-up, NSCC has shown strong financial performance and demonstrated a strong track record in meeting international standards for insurance, environment/social performance and local community development. Key development impacts of the project could be summarized as:   - Provide high-quality cement for Vietnams infrastructure development and construction secto:  The company has been running at over 100% capacity and is not able to meet demand.  Vietnams 8% growth over the past several years has been underpinned by infrastructure and construction sectors, which has been growing at over 10% annually.  The government has a stated policy to encourage more integrated cement capacity in Vietnam and to eventually scale-down polluting vertical shaft kiln technology plants. The Project will help the government achieve these development objectives.   - Supply underdeveloped south-central market:   Through development of new Nha Trang distribution terminal, the project will supply an undersupplied market and facilitate the development of local tourism resorts and infrastructure.   - Increase scale and efficiency of existing assets:   NSCC is already an efficient producer of high-quality cement employing about 465 people. The expansion will enable the company to achieve scale economies on overheads and higher efficiency overall, as well as generate more tax income.  The cement tanker will lower cost and increase reliability of cement deliveries to the Southern markets.  - Employment and Development of Remote Area:  The project will create incremental employment in the underdeveloped Nghi Son area. In addition to 125 permanent jobs, there will be significant construction employment. Due to the expansion of the company among other factors, Electricity of Vietnam (EVN) is building local power generating capacity which will help develop the area into an industrial zone.   - Strengthening VICEM Management:   The joint venture platform will help VICEM continue to improve its managerial, finance and marketing capabilities through working with Japanese partners.