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| 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. |
Summary of Project Information (SPI) |
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| Project number | 11620 |
| Project name | Satipel Industrial S.A. |
| Country | Brazil |
| Sector | Industrial & Consumer Products |
| Department | Global Manufacturing & Services |
| Company name | Satipel Industrial S.A. |
| Environmental category | B |
| Date SPI disclosed | July 16, 2002 |
| Projected board date | August 30, 2002 |
| Status | Completed |
| Previous Events | Invested: April 1, 2003
Signed: January 6, 2003
Approved: October 9, 2002 |
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| Project sponsor and major shareholders of project company |
| The project sponsor is Cia Ligna de Investimentos (the Ligna Group) a medium sized Brazilian group which operates in industrial segment, construction materials' retail sector, real estate and particleboard production. The Ligna Group controls Satipel Industrial S.A. (Satipel or the company). Unibanco, Brazil's third largest bank, is a minority shareholder in the company. Satipel's capital is composed of common (voting) and preferred (nonvoting) shares. The preferred shares are held by Decor Holding, a Ligna Group holding company. |
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| Total project cost and proposed IFC investment |
| The total project cost is estimated at US$50.5 million. IFC will assist Satipel by providing a financial package of up to US$25 million for its own account consisting of: (i) an A Loan for up to US$15 million; and (ii) a C Loan for up to US$10 million. |
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| Location of project and description of site |
The project will be implemented in the company's existing production facilities, located in Taquari and Uberaba.
Taquari city is in the state of Rio Grande do Sul. This city has a population of 25,000 people. Taquari is well connected with the national road system and is only 110 km from the main furniture producing center in Brazil (Bento Gonçalves).
Uberaba city is located in the state of Minas Gerais. The city’s population is estimated at 235,000 people. Uberaba is also well connected with the national road system. It is located in one of the fastest growing regions of Brazil, and is close to the main consumption region of furniture (the São Paulo state).
Both sites are located in a designated industrial area. The development will not result in resettlement or economic displacement. |
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| Description of company and purpose of project |
Satipel, a medium-sized, family-owned company, is one of Brazil's leading manufacturers of particleboard. In 2001, the company produced 490,000 m3 of particleboard in 2001. The proposed project will: refinance existing debt; make minor maintenance investments; finance environmental upgrades; and further invest in plantations.
IFC Role
IFC has three important roles to play in this project. First, IFC will provide the necessary term financing for a medium-sized Brazilian company. The Brazilian economic crisis, the political uncertainty stemming from the upcoming presidential election, the current crisis in Argentina, and the September 11 events in the United States, have made long-term financing difficult to obtain for Brazilian companies. The dearth of such financing has been a major constraint for the development of the private sector, hampering modernization and employment growth in Brazil's economy. Under current conditions, both in international and domestic Brazilian financial markets, even large firms have difficult access to long term financing, driving a substantial consolidation in various industries. The only way for a commercially viable and otherwise efficient mid-size firm, such as Satipel, to compete is through the support of sources such as IFC. Second, the IFC investment would introduce Satipel to international lending that would enhance its visibility and credibility preparing the company to go public in the next few years. Indeed, Satipel management intends to turn this family business into a large profitable public company. The owners have indicated their strong desire to have IFC as a “partner” in order to increase the chance of success of the company’s upcoming initial public offering. Last, IFC's involvement would support an environmentally-sound-wood-products company.
Development Impact
The proposed investment would improve the operating efficiency of a medium-sized enterprise. Furthermore, the project will assist the country in maximizing its comparative advantage in the forestry products. Satipel utilizes low cost plantation pine and helps consumers avoid the high transportation costs associated with imports. In addition, as part of the company’s investments in the forestry operations, Satipel will provide financing to local farmers to introduce them to the forestry operations. The program is expected to reach more than 20 farmers, and a total of 500 ha. per year. The company will provide the seedlings and extensive training to the farmers. The farmers will benefit from the use of non-adequate land for agriculture, diversifying their activities, taking advantage of the use of current labor, and thus, increasing their annual revenues from the use of the land. |
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| 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 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 and environmental information submitted by the project sponsor. The following potential environmental, health and safety impacts of the project were analyzed:
· Plantation management (including retention of natural habitats and pest control), impacts (including water table changes) and sustainable harvesting issues;
· Production issues relating to third party supplies of wood;
· Air emissions;
· Water use and waste water management;
· Hazardous materials use and solid waste management and disposal;
· Fire protection and emergency response;
· Occupational health and safety;
· Job creation, retrenchment and labor issues;
· Opportunities for environmental certification of wood products.
To view the environmental documents for this project, click here
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| Location of environmental documents in locally affected community |
The ERS will be disclosed locally in the company's administrative offices in Taquari and Uberaba and will also be available at the company's web site.
- Taquari Administrative Offices Address: Rua Júlio de Castilhos, 1787 -Taquari, RS - Brazil
- Uberaba Administrative Offices Address: Av. Bernardo Seibel, 300 - Distrito Industrial 1, Uberaba, MG - Brazil
- Satipel's Web Site: www.satipel.com.br |
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| To contact the project company, please write to: |
Mr. Laercio Lessa
CFO, Satipel Industrial S.A.
Rua Moyses de Kahan 216, Sao Paulo, SP - Brazil (01139-040)
Email: laercio.lessa@satipel.com.br |
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