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| PT SPV IV |
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| Summary of Proposed Investment |
| This Summary of Proposed Investment 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. |
| Project number | 26784 |
| Company name | P.T. South Pacific Viscose |
| Country | Indonesia |
| Sector | Chemicals |
| Environmental category | B |
| Department | Global Manufacturing & Services |
| Status | Pending Approval |
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| Date SPI disclosed | August 27, 2008 |
| Projected board date | September 29, 2008 |
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| View Environmental & Social Review Summary (ESRS), click here |
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| Overview |
Sponsor/Cost/Location |
Development Impact |
Contacts |
Attachments |
| Project description |
| PT. South Pacific Viscose (SPV or the company) plans to undertake a capital investment program at the company’s existing site in Indonesia over the 2008-2009 period which includes expansion of the viscose production capacity by 66,400 tons per annum, other ancillary investments (including a 30 MWe captive power plant, a gas-based CS2 plant and a sulphuric acid plant), incremental working capital and other on-going capital expenditures. |
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| Project sponsor and major shareholders of project company |
| The main shareholder and company sponsor is Lenzing A.G. In 2007, a leading viscose producer in the world and operator of an integrated 225,000 tons per annum (tpa) fiber and a 240,000 tpa pulp plant in Austria. The remaining shareholdings are held by PT Pura Golden Lion (11.92%) and Mrs. Saqarsih Noor Luddin (2.29%). The former is the local partner and the domestic selling agent for SPV; and the latter a natural person. |
| Total project cost and amount and nature of IFC's investment |
| The project is expected to cost $191 million. IFC is considering an A Loan of up to $40 million and B Loan of up to $100 million to support the project. |
| Location of project and description of site |
| The project is being undertaken at the company’s existing site in Purwakarta, Indonesia. |
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| Anticipated development impact of the project |
The project supports the sustainable development of viscose industry by:
- building new VSF capacities based on renewable raw material – dissolving grade wood pulp;
- reducing the environmental impact through the nearly closed production cycle and by switching to gas-based CS2 production; and
- maintaining employment of local people and creating additional jobs. |
| IFC's expected development contribution |
IFC’s role in this investment will be to:
- Providing long-term financing to a competent industry player in the country where such financing is still not readily available;
- Mobilizing long-term funds from the international market under the B Loan umbrella;
- Serving as a dependable long-term partner who is there to provide support in difficult as well as good times in a perceived high risk country. |
| Environmental and social issues - Category B |
This is a Category B project according to IFC’s Procedure for Environmental and Social Review of Projects.
The proposed project introduces modern production technologies that are energy efficient, allow for recovery of waste heat and will result in a net reduction in emissions to the environment.
While all Performance Standards (PS) are applicable to this investment, IFC’s environmental and social due diligence indicates that the investment will have impacts which must be managed in a manner consistent with the following Performance Standards:
- PS 1: Social and Environmental Assessment and Management System
- PS2: Labor and Working Conditions
- PS3: Pollution Prevention and Abatement
- PS4: Community Health, Safety and Security
Environmental, social and health and safety issues identified during IFC's review and any ameliorative measures are summarized in the Environmental and Social Review Summary (ESRS) and associated Environmental and Social Action Plan (ESAP) that South Pacific Viscose will implement as a part of IFC's Loan Agreement. Upon successful implementation of the specific agreed mitigation measures, the proposed project is expected to comply with Indonesian laws and regulations, IFC Performance Standards and applicable sections of the corresponding guidelines. |
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| For inquiries about the project, contact: |
Mr. Hemawan P. Utomo
General Affairs & Community Relation
South Pacific Viscose
Telephone: +62-264 278 642
Fax: +62-264 200 738 |
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| For inquiries and comments about IFC, contact: |
General IFC Inquiries
IFC Corporate Relations
2121 Pennsylvania Avenue, NW
Washington DC 20433
Telephone: 202-473-3800
Fax: 202-974-4384
E Mail: Webmaster |
| Local access of project documentation |
Environmental and social information pertaining to the project (ESRS and ESAP) will be available for access by the locally affected communities at the Purwakarta Town Hall and outside the company’s premises at the following addresses:
South Pacific Viscose
Desa Cicadas, Purwakarta 41101
West Java, Indonesia
Telephone: +62-264 278 642
Purwakarta Town Hall
Jl. Gandanegara Nomor 25
Purwakarta
West Java, Indonesia
Telephone: +62-264 200 036 |
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