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This Environmental Review Summary is prepared and distributed 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.
Any documentation which is attached to this Environmental Review Summary has been prepared by the sponsor and authorization has been given for public release. IFC has reviewed this documentation and considers that it is of adequate quality to be released to the public but does not endorse the content.
Environmental Review Summary
Project number 11766
Project nameR.A.K. Ceramics (Bangladesh) Pvt. Ltd.
SectorGlazed Ceramic Tiles
DepartmentGbl Ind, Manufact, Agribus & Services
Environmental categoryB
Date ERS disclosedNovember 11, 2002
Previous EventsInvested: February 28, 2003
Signed: February 8, 2003
Approved: December 30, 2002

Project description
RAK-Bangladesh is the largest ceramic tiles manufacturer in Bangladesh. It started its operations in November of 2000 with a manufacturing capacity of 2.0 million square meters per annum (sqm p.a.) of tiles. The proposed project involves: expansion of the existing ceramic tiles manufacturing capacity to 4.0 million sqm p.a. and setting up a 250,000 pieces p.a. sanitaryware plant.

The proposed project will enable an internationally competitive local enterprise in the sanitaryware and ceramic tiles sector to expand. It will stimulate usage of the abundantly available, domestic raw materials such as clay and silica sand, as well as natural gas. The proposed project will create up to 300 direct jobs. Initially, RAK-Bangladesh’s production will be mostly for the local market where the project will contribute to import substitution and the consumers will gain substantially due to the lower prices resulting from the project. The Company plans to export to neighboring countries at a later stage. The project will also stimulate transfer of most advanced production technology, know-how and local staff training by a leading European equipment manufacturer and experienced Sponsor.

IFC’s role in the proposed project involves: (i) providing long-term loan for the financing that would otherwise be difficult to mobilize from the local banks only; (ii) providing comfort to local banks and/or other financial institutions to lend to the Company; (iii) supporting a healthy, local, internationally competitive producer; and (iv) ensuring that RAK-Bangladesh conforms to high standards of environmental, safety and social consciousness, as well as to improved corporate governance.

Environmental Category B disclosure requirements
IFC requires that this document is made available through the World Bank InfoShop and to the locally affected community no less than 30 days prior to project consideration by the IFC Board of Directors.

The Summary of project Information (SPI) provides details of where the ERS has been made available to the locally affected community. The SPI must be sent to InfoShop no less than 30 days prior to project consideration by the IFC Board of Directors.

To view the Summary of Project Information(SPI) for this project, click here

Environmental and social issues
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 technical, environmental and social information submitted by the project sponsor. The following potential environmental, health and safety and social impacts of the project were analyzed:

- Land acquisition and previous use

- Employment practices and working conditions
- Emissions to air, water and land
- Possible use, storage and disposal of hazardous materials
- Environmental and health and safety management including fire safety and emergency response

Proposed mitigation for environmental and social issues
The sponsor has presented plans to address these impacts to ensure that the proposed project will, upon implementation of the specific measures agreed, comply with applicable host country laws and regulations and World Bank/IFC requirements. The information about how these potential impacts will be addressed by the sponsor/project is summarized in the paragraphs that follow.

The management of RAK Ceramics (Bangladesh) Pvt Ltd (RAKB) has declared its commitment to implement all necessary actions to ensure the company complies with all relevant World Bank Group’s environmental and social policies. Necessary actions to bring existing operations into compliance have started.

Land Acquisition and Previous Use
The existing tiles factory occupies a site of some 35,000 m2. An additional 22,000 m2 adjacent to the factory site and already owned by RAK will be used for the proposed factory extension. RAKB may require additional warehousing of some 2,000 m2 and may rent space locally or buy additional land for this.

All land currently owned by RAKB was bought from local farmers in 1998. The government was not involved in the transaction. The price was agreed after negotiation, was paid in cash and there were no complaints. No people were living on the land which was barren and supported no economic activity. Adjacent land which may be acquired for warehousing is also unused and uninhabited. There are no objects of cultural property on existing or possible future project land.

Employment Practices and Working Conditions
RAKB states that it complies with the Bangladesh Labor and Industrial Law and the Company Act of 1994.

The minimum age of all employees is 21 years.

Emissions to Air, Water and Land
Emissions to Air
Potential emissions to air are dust arising from manufacturing operations and products of combustion, drying and firing operations.

All raw materials will be stored in closed bins to minimize dust production. Centralized dust collection systems will be provided for all process operations (e.g. ball mill, dried ware inspection, glaze spraying) in which dust may arise. Solids collected in these systems will be reused in the process.

It is not expected that air emissions from fired heaters will have any adverse environmental impact for the following reasons.
  • All fired heaters and the standby generator use sulphur-free natural gas fuel, therefore oxides of sulphur are not present in exhaust gases.
  • Process fired heaters use low NOx burners. RAKB will confirm that burner manufacturers' specifications will meet IFC NOx emissions standards.
  • Spray dryers are equipped with cyclone separators and wet scrubbers.

Standby generators are used infrequently.

Particulate emissions from fired heaters and dust control devices are not known. RAKB has undertaken to measure these emissions and take additional mitigation measures if necessary.

Air emissions are reduced by a number of energy efficiency measures including:
  • recovery of heat from the kiln exhaust to the pre-dryers;
  • high standards of kiln insulation and use of lightweight kiln cars;
  • variable speed fan drives;
  • metering and active management of gas used in furnaces.

Data from RAK's sanitary ware factory in the United Arab Emirates shows very good energy efficiency, and the new factory should also be highly efficient.

Emissions to Water
Process effluent contains clay particles. All effluent will pass through a series of settling tanks. The resulting cleaned water is reused in tile preparation. Settled clay will be collected periodically and sold for landfill of lowland areas.

Storm water is not expected to be contaminated, hence it is directed to public drainage without treatment.

Sanitary waste water is pre-treated on site in a septic tank which is emptied annually with residue treated at the municipal waste water treatment works. Domestic water use is reduced through use of spray taps and low flush toilets.

Emissions to Land
Solid waste comprises rejected fired wares, plaster molds and some dust from pollution control devices. This material is bought by private individuals for use in land-filling of lowland areas which are prone to flooding.
The volume of solid waste is reduced by in-process recycling. Rejected materials from the casting section, dry ware inspection and glaze spraying will be re-used in preparation of sanitary ware bodies. Excess glaze from the spraying section will be collected, reprocessed and reused.

Hazardous Materials
RAKB has provided a list of all materials used in glaze and pigments. None of the materials to be used contains cadmium, lead or any other heavy metal.

Environmental and Health and Safety Management
Environmental management and emergency response plans were not in place at the time of IFC's environmental and social review. RAKB has committed to develop to IFC's satisfaction an environmental and health and safety plan incorporating training and emergency response plans by March 31, 2003.

Occupational Health and Safety Management.
RAK has undertaken to commission measurements of workplace noise and air quality, though no ambient air quality problems are suspected.
RAK has reported that the following features and procedures are employed in the factory:
  • housekeeping is good, ensuring that the factory is generally clean and tidy;
  • Noisy machines are installed in dedicated plant rooms in which hearing protection is provided;
  • Existing and proposed factory buildings are well ventilated and lit;
  • Adequate potable water and cleaning facilities will be provided for employees;
  • All emergency exit points are identified and emergency lighting is provided;
  • Personnel Protective Equipment (PPE) such as ear defenders, dust masks, gloves, eye protection) are provided where required;
  • Operators are trained in the correct use and handling of materials and machinery;
  • All moving machine parts are guarded;
  • All stairways have handrails;
  • Scrap fired ware is stored in steel drums to minimize the rise of cut injuries to employees.

Fire Protection
The fired heaters are all provided by the Italian company SACMI, one of the world leaders in ceramics industry machinery. Gas control systems, and the kiln, furnace and dryer lighting procedures will meet worldwide best practice standards.

Other than fuel, the only inflammable materials used in the process are paper packaging cartons. Fire extinguishers and buckets of sand are provided in the packaging area and elsewhere. A fire alarm system will be installed, and firefighting stations, supplied by electric and engine-powered pumps, will be installed throughout the factory.

Accordingly, IFC concludes that the proposed project will meet the applicable World Bank/IFC environmental and social policies and the environmental, health and safety guidelines upon successful implementation of the agreed mitigation measures.

Monitoring and compliance
IFC will evaluate the project's compliance with the applicable environmental and social requirements during the lifetime of the project by reviewing the annual monitoring reports (AMRs) prepared for the project covering: (i) the status of implementation of any measures contained in the Environmental Action Plan and (ii) ongoing performance of project-specific environmental, health and safety activities [as reflected in the results of periodic and quantitative sampling and measuring programs.] Periodic site supervision visits will also be conducted as required.