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Summary of Project Information (SPI)

This Summary of Project Information is prepared and distributed to the public 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 decision. Board dates are estimates only.
Project number24669
Project nameCTI Group I
CountryJordan
SectorWater Transportation
Department
Company nameCTI Group Inc.
Environmental categoryB
Date SPI disclosedMarch 7, 2006
Projected board dateApril 10, 2006
StatusActive
Previous EventsInvested: July 24, 2006
Signed: June 22, 2006
Approved: May 26, 2006

Description of company and purpose of project
Established in 1990 as a cement and clinker trading company, CTI Group Inc. (CTI or the Group) now ranks among the largest specialized cement carrier fleet owners in the world. The Group’s activities cover all aspects of logistics for the specialized cement trade including trading, handling, and transport. The Group is embarking on an investment program that will renew and expand its fleet. The fleet renewal will help CTI reduce its operating costs (staffing and insurance), optimize its fleet structure and expand its transport operations.

Over the next three years, the Group will need to fund vessel acquisitions & dry docking costs, and debt refinancing (the project). CTI plans to finance the project by a combination of IFC debt and equity, commercial debt, and cash from operations. The short term tenor of CTI’s existing debt is a constraint to the implementation of the Group’s vessel acquisition plan. CTI is looking to replace this existing shorter tenor debt with long-term financing that matches the long- term nature of its assets.

Project sponsor and major shareholders of project company
CTI is structured as a holding company incorporated in the Cayman Islands. The Group is owned by two well-reputed Jordanian entreprenuers who come from families with extensive business experience in Jordan, the Kawasmi and Dajani families.

Total project cost and proposed IFC investment
IFC’s investment in CTI is proposed to be in the form of a $12 million corporate loan facility and a $3 million convertible loan. This will be used towards the project cost which is estimated to be $43 million.

Location of project and description of site
CTI’s fleet of cement carriers and floating terminals operate on a global basis. Historically, CTI’s fleet has served the following countries/regions: Egypt and Red Sea region, India, Sri Lanka, Qatar, USA, and the Mediterranean and Black Sea regions. CTI’s management are headquartered in Amman, Jordan.

Project Development Impact and IFC's Role
The Group has had positive economic and developmental impacts and is expected to continue doing so due to the project. By shipping and trading cement between countries with cement production surpluses (and low prices) and countries facing shortages (and high prices), the Group allows both sides to benefit and enhances the efficiency of the global cement market. The project will facilitate cement exports from countries with excess supply (like Egypt, Thailand, China and India) to countries where there is a shortage of cement production capacity (like the US and the Middle East, as targeted by the company’s strategy). Therefore, both the cement industry in exporting countries and the construction industry in importing countries would benefit from the project. With an estimated 6.0-6.5% market share of seaborne cement trade, CTI is a significant player but not one of the largest, so its activities contribute to making the industry more competitive.

IFC’s long term financing will help fill a critical funding gap and allow CTI to match its long term assets with long term finance. For the IFC, this would be the first project in the transportation and logistics sector in the MENA region and would support a private Jordanian company in the international cement shipping and trading industry. The success of this Project would serve as a demonstration effect for local banks looking to finance shipping companies in the region. The successful penetration of a global and competitive market by Jordanian entrepreneurs could induce other entrepreneurs in the region to emulate their success. IFC’s equity investment and its involvement in the implementation of a Corporate Governance Improvement Plan will enhance the Group’s attractiveness ahead of the sale of shares to new investors.

Environmental and social issues - Category B
This is a Category B project. The review of this project consisted of appraising technical and environmental information submitted by the project sponsor, and site visits and vessel reviews conducted by IFC staff and consultants. The following potential environmental and health and safety impacts were analyzed:

- Environmental, health and safety management systems;
- Vessel safety and pollution control; and
- Employee health and safety.

CTI has presented plans to address these impacts to ensure that the proposed project will, upon implementation of specific agreed measures, comply with applicable environmental, health and safety (EHS) requirements, including: international maritime standards under SOLAS, MARPOL, the International Safety Management (ISM) code, and World Bank/IFC environmental and social policies.

To view the environmental documents for this project, click here


Location of environmental documents in locally affected community
This ERS contains a summary of IFC’s review prepared for the project. Additional information can be obtained directly from the following contact:

Mr. Nawras S. Anfoka
CFO,CTI Group
Phone: +962 6 5685115
Fax: +962 6 5676939

To contact the project company, please write to:
Mr. Nawras S. Anfoka
CFO,CTI Group
Phone: +962 6 5685115
Fax: +962 6 5676939

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