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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 number23013
Project namePT Prakarsa Alam Segar; PT Karunia Alam Segar
SectorOther Food
Environmental categoryB
Date SPI disclosedMay 18, 2004
Projected board dateJune 18, 2004
Previous EventsInvested: July 27, 2004
Signed: June 23, 2004
Approved: June 22, 2004

Description of company and purpose of project
PT Karunia Alam Segar (KAS) and PT Prakarsa Alam Segar (‘PAS’), whose affiliates are existing IFC clients in Indonesia, are expanding into the instant noodle business by establishing plants in Jakarta and Surabaya. They plan to set up several noodle lines in both Jakarta and Surabaya by the end of 2004, with the Surabaya plant also producing beverages and seasonings.

Project sponsor and major shareholders of project company
The sponsor of the project is PT Mitrajaya Ekaprana, a local private Indonesian company owned by several individuals. Mitrajaya Ekaprana owns almost 100% of KAS and PAS.

Total project cost and proposed IFC investment
Total project cost is estimated at $100 million. IFC proposes to finance $45 million in the form of an A Loan and a B Loan.

Location of project and description of site
P.T. Prakarsa Alam Segar (PAS), Bekasi
The Jakarta plant is located on an 11 ha site, formerly a textile factory, in an industrial area of Bekasi, and opened in December 2003.

P.T. Karunia Alam Segar, Gresik
The KAS plant in Surabaya occupies a portion of a larger industrial site of 75 ha located in north Gresik in a developing industrial area. The area was formerly occupied by brackishwater fish ponds which are now being filled as the city expands. The land was purchased from the previous owners on a willing seller-willing buyer basis, and no residents or land users were displaced. This plant started operation in early 2003.

Project Development Impact and IFC's Role
The project’s noodle lines will enable the creation of several thousand new jobs (on a 3-shift basis) for workers and also jobs for administrative and R&D positions in locations where currently there is very high incidence of unemployment. The market is currently dominated by one player, Indofood. The entry of another player will lead to an increase in competition that would translate to lower prices for consumers. Also, it will benefit farmers who would be supplying fresh ingredients to the project.

IFC is re-engaging selectively in Indonesia, assisting reputable clients in key sectors such as agribusiness, extractive industries, infrastructure and financial sector. IFC will play a vital funds mobilization role in this transaction as potential B Loan banks do not want to lend to the Project directly but under the IFC B Loan umbrella.

Environmental and social issues - Category B
This is a Category B project according to IFC’s Procedure for Environmental and Social Review of Projects because a limited number of specific environmental and social impacts may result which can be avoided or mitigated by adhering to generally recognized performance standards, guidelines or design criteria. The review of this project consisted of appraising both plants and reviewing technical and environmental/social information submitted by the project sponsor. The following potential environment, health and safety and social impacts of the projects were analyzed: existing and planned management systems for quality, environment and health and safety; occupational health and safety; food safety; air emissions from steam and heat generation; sustainability and quality of potable water supply used in food manufacturing; liquid waste management; biological control of pest species; and, solid waste management.

To view the environmental documents for this project, click here

Location of environmental documents in locally affected community
Environmental documents will be made available at the local public post office.

To contact the project company, please write to:
Michael Tan
P.O. Box 7668 JAK CA Jkt,
Jakarta Timur