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| Yildiz Entegre |
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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 | 25595 |
| Company name | Yildiz Entegre Agac Sanayi A.S. |
| Country | Turkey |
| Sector | Industrial & Consumer Products |
| Environmental category | B |
| Department | Global Manufacturing & Services |
| Status | Dropped |
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| Date SPI disclosed | March 1, 2007 |
| Projected board date | April 2, 2007 |
| Previous Events | Approved: May 29, 2007 |
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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 |
Yildiz Entegre (YE or the company) was founded in 1965 by the Yildiz Family to trade wood products in Samsun, a city in the western Black Sea Region of Turkey. Today, YE produces a full range of wood products, such as medium density fiberboard (MDF) profiles, laminated boards, flooring, and doors. YE is the largest medium density fiberboard (MDF) manufacturer in Turkey with a production capacity of 660,000 (cubic meters) m3/year.
The purpose of the project is to:
- expand the production capacity of the company through the addition of a new 330,000 m3/year medium density fiberboard (MDF), (raising overall capacity of YE close to one million m3/year of MDF);
- a door plan expansion to increase capacity from 700,000 to 1.2 million doors/year,
- finance working capital, interest during construction, and contingencies,
- refinancing of certain short term loans. |
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| Project sponsor and major shareholders of project company |
| Yildiz Entegre is 70% owned by Yildizlar Yatirim Holding (YYH) and 30% by individuals of the Yildiz family: mainly Mr.Fehmi Yildiz and his two sons (Mr. Hakki Yildiz and Mr. Hasan Yildiz), who are also main shareholders in YYH. The Yildiz family also owns Istanbul Gubre Sanayi A.S (Igsas) and Kutahya two formerly state owned fertilizer plants. YE is the market leader in the domestic MDF industry and a well-known name in the business community and banking circles. With its production capacity of 660,000 m³ of MDF/year and 240,000 tons of glue/year, YE is also the largest fiberboard and adhesives producer in Turkey with an estimated domestic market share of 33% in the MDF industry. The company owns Europe’s largest single MDF line. |
| Total project cost and amount and nature of IFC's investment |
| The estimated total projected cost is $100 million. The proposed IFC investment is up to a $50 million equivalent A loan (in Euros). The remaining project financing amount of $50 million will include equity in the form of internally generated cash. |
| Location of project and description of site |
| The new MDF plant will be located on the existing plant site in Gebze, Koceali, in an industrial district about 100 kilometers east of Istanbul, and 2 kilometers from the main highway between Istanbul and Ankara. The new line will be sharing the existing infrastructure with the two current lines. |
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| Anticipated development impact of the project |
| The investment will help increase YE’s competitiveness and export capacity. As YE is currently operating at full capacity, it is unable to meet export demand (exports make up less than 10% of sales at present). The company will be able to supply the customers with value-added products and high quality MDF at affordable prices in a timely manner. The project will thus help further develop the local furniture and construction industries in their rapid growth. The investment will also help support an emerging regional player in the industry, which may transfer its technology to new markets in the future. Between the new MDF plant and the door plant, an estimated 600 direct jobs will be created, with more indirect jobs in up- and down stream operations. |
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| IFC's expected development contribution |
| IFC will be able to provide a stable long-term funding base for the company as it continues to grow in Turkey and ventures abroad. IFC will also be able to assist the company in the area of corporate governance as YE transforms from a second-tier family-owned company to a more professional entity and to prepare the company for a planned IPO (initial public offering). IFC could help improve the company’s environmental policies by implementing best practice guidelines. IFC would further help evaluate raw material issues and plantation plans. The company sees IFC as a potential long-term partner, as it has future expansion plans in Turkey as well as Iran (its major export market) and Ukraine (where raw material is abundant). |
| Environmental and social issues - Category B |
| This is a Category B project according to IFC’s Environmental and Social Review procedure. Environmental, social and health and safety issues which may be associated with this project and which will be reviewed during project appraisal. (to be reviewed further) |
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| For inquiries about the project, contact: |
Mr. Hakki Yildiz, Director
Organize Sanayi Bolgesi No. 5
Arslanbey/Koceali/ Turkey
Telephone: +90 262 316 6100
Fax:+90 262 316 6196
Environmental documentation will be made available at the following location:
Hakki Yildiz
Yildiz Entegre A.S.
Organize Sanayi Bolgesi No:5 Arslanbey-41285
Turkey
Telephone:+ 90 262 3166100
Fax:+ 90 262 3166196
Websites:
www.yildizentegre.com.tr
www.vario.com.tr |
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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 |
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