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.