IFC INVESTS IN PACKAGING PAPER COMPANY IN CROATIA
—Project will help to rebuild and modernize company—
L. Joseph
Phone: (202) 473-7700
Fax: (202) 974-4384
E-mail: Ljoseph@ifc.org
BELISCE, CROATIA, March 24—The International
Finance Corporation (IFC) signed an agreement in Croatia today to provide
loans and equity for a major modernization and rehabilitation of Belisce
d.d., the leading packaging paper and packaging materials producer in Croatia.
Belisce has been in the wood processing business since 1884 and,
for the last 36 years, has produced and sold packaging paper and corrugated
products.
This DM74.7 million (about US$42.2 million equivalent) project is designed
to strengthen Belisce’s international competitiveness and address its
existing production problems, which are the result of relatively old equipment
and war damage to the plant. Belisce will be able to broaden its
product range by introducing new grades of packaging paper, such as, wastepaper-based
fluting, testliner and new types of packaging products. It will also
reduce operating costs by increasing productivity and decreasing the consumption
of energy; significantly improve environmental aspects of the operations;
and strengthen the company’s shareholder structure to ensure a smoother
transition from state-owned enterprise to private ownership.
Mr. Harold Rosen, IFC’s Director for Central and Southern Europe said
that the project would help to modernize and rebuild the company, which
suffered significant wartime damage, as well as safeguard the jobs of 2,300
workers in a region where Belisce is a key employer. The syndicated
portion of the loan is also likely to attract more foreign direct investment
and long-term financing to Croatia. In addition, the project will
help to increase foreign exchange earnings from export sales, which account
for more than two-thirds of the company’s total revenue.
IFC’s financing package consists of a loan of up to DM25 million (about
US$14.1 million equivalent) for IFC’s own account and a loan of up to
DM25 million (about US$14.1 million equivalent) for the account of participants,
as well as an equity investment of up to DM11 million (about US$6.2 million
equivalent).
IFC has had a long-standing relationship with Belisce, whose management
team is both technically and commercially capable. The Corporation
financed major expansion projects of the company in 1973 and in 1980. Both
projects were successfully completed and loans fully repaid despite wartime
conditions that caused loss of life as well as significant damage to the
Belisce plant.
IFC, part of the World Bank Group, fosters economic growth in the developing
world by financing private sector investments, mobilizing capital in the
international financial markets, and providing technical assistance and
advice to governments and businesses.
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