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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. |
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| Project number | 24017 |
| Project name | Bosnalijek expan |
| Country | Bosnia and Herzegovina |
| Sector | Chemicals |
| Department | Global Manufacturing & Services |
| Company name | Bosnalijek, d.d. Sarajevo |
| Environmental category | B |
| Date SPI disclosed | February 25, 2005 |
| Projected board date | March 29, 2005 |
| Status | Active |
| Previous Events | Invested: June 30, 2005
Signed: June 13, 2005
Approved: May 16, 2005 |
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| Description of company and purpose of project |
Bosnalijek d.d. Sarajevo (Bosnalijek or the company), an existing IFC client, is the largest pharmaceutical company in Bosnia and Herzegovina (BiH) is implementing a Euro 18.5 million project to construct a Production-Distribution Center. The PDC will consist of the two connected entities:-
- a line for production of solid form drugs, which will increase the present capacity from 200 million tablets p.a. to 768 million tablets p.a., and
- a warehouse area of approximately 5,000 sq.m. Construction of the PDC started during summer 2004 and is expected to be completed by end of 2006. |
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| Project sponsor and major shareholders of project company |
| Bosnalijek is a Joint Stock Company with mixed ownership that was established in 1951 in Sarajevo, the capital of Bosnia and Herzegovina. The BiH Government owns 28.9% shares, Privatization Investment Funds have a cumulative 7.8% shares, IFC has 12.52% shares and the remaining 50.8% is owned by management, employees and other individuals . Bosnalijek is a generic drug manufacturer. It has a range of 165 drugs in solid oral forms, ampoules, syrups, solutions, ointments and creams, of which, 90% is produced and sold under Bosnalijek's brand name. Today, Bosnalijek is the largest pharmaceutical producer in Bosnia and Herzegovina with sales of around Euro 36.0 million in 2004, market share of 26% and 505 employees. Its export sales has grown eight times since 1999 and reached 13% of sales revenue in 2004. |
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| Total project cost and proposed IFC investment |
| Total project cost is estimated at Euro 18.5 million. The proposed IFC investment is a Euro 7.5 million senior loan . |
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| Location of project and description of site |
| Bosnalijek’s headquarter and production facilities are located in Sarajevo, BiH. The project will be conducted at the company’s production site. |
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| Project Development Impact and IFC's Role |
Being a producer of generic pharmaceutical products with a dominant position on the market, Bosnalijek’s contributes towards more affordable and better quality health care. With this investment, it will be able to increase variety of domestically produced drugs and replace more expensive imported medication. Consumers will pay less for a comparable quality medicine, the amount equal to custom duties on imported products. Developmental impact extends beyond the health care system; being one of the most successful local companies, Bosnalijek represents a stable source of government income and plays a role model for other public companies in the country. Expansion brought about by the project is expected to almost double sales of the company by 2014 and, hence, increase government’s tax revenue.
The project will also contribute to a cleaner environment through treatment of all process waste water. The company’s adherence to stringent IFC environmental and social policies will set a good example for other companies to follow. IFC has also a strong role in supporting the project by providing much needed long-term affordable financing and a technical expertise. |
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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.
To view the environmental documents for this project, click here |
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| Location of environmental documents in locally affected community |
The press release will be on March 1, 2005 in the Sarajevo daily newspaper “Oslobodzanga.”
The company will also make the disclosure at Bosnalijek city lights located on three tram stations in Sarajevo for 30 days starting from March 1, 2005. |
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| To contact the project company, please write to: |
Mr. Edin Arslanagic
General Manager
71000 Sarajevo, Jukiceva 55,
Bosnia and Herzegovina |
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