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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 | 10542 |
| Project name | Kronospan Bulgaria II |
| Country | Bulgaria |
| Sector | Industrial & Consumer Products |
| Department | Global Manufacturing & Services |
| Company name | Kronospan Bulgaria EOOD |
| Environmental category | B |
| Date SPI disclosed | November 8, 2000 |
| Projected board date | December 12, 2000 |
| Status | Active |
| Previous Events | Invested: March 15, 2001
Signed: February 9, 2001
Approved: February 8, 2001 |
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| Project sponsor and major shareholders of project company |
| Kronospan Bulgaria EOOD, established in 1996, is a limited liability company incorporated in Bulgaria. The company is 100%-owned by Kronospan Holding Limited (Cyprus), the parent company of the Kronospan Group in Eastern Europe. The Kronospan Group, a European leader in wood panel board manufacturing, is the sponsor of the project |
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| Total project cost and proposed IFC investment |
| The expansion project cost is estimated at Euro 20 million. IFC's proposed investment consists of a A loan of Euro 8 million for IFC's own account and a syndicated B loan of Euro 2 million. |
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| Location of project and description of site |
| The mill is situated on the outskirts of the city of Bourgas in eastern Bulgaria on the Black Sea coast. The location provides the mill convenient sea and land transport connections to the Middle East, North Africa, Turkey and Greece. The mill is situated on 27 hectares, of which only a portion is used for production purposes, therefore providing possibilities for further expansions. |
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| Description of company and purpose of project |
The project is to set up an Oriented Strand Board (OSB) line on existing premises at Bourgas, which would substitute a previously planned particleboard line and would further upgrade the existing facilities.
The project will double current production capacity, and further increase melamine-facing capacity. The added new capacity will achieve economies of scale, which are critical for the industry. The project is expected to boost margins, enhance the company's competitive position in Southeastern Europe and provide strategic diversification. In addition, the project will contribute to the modernization of the Bulgarian wood panel industry, which is currently characterized by inefficient, low-quality operations and will have a potential strong impact on the development of the industry in the country.
IFC’s role in the proposed project is three-fold: (i) increase confidence in and support for the Government’s privatization efforts; (ii) act as a catalyst for foreign investment and private sector participation in Bulgaria; and (iii) help the Sponsors gain access to long-term financing. |
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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 and/or social 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 environmental documents are available in the company's offices at Kronospan Bulgaria EOOD, Severozapadna Promishlena Zona, 8000 Bourgas, Bulgaria. |
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| To contact the project company, please write to: |
Mr. Kris Nenov, Managing Director, Kronospan Bulgaria EOOD, Severozapadna Promishlena Zona, 8000 Bourgas, Bulgaria.
phone: +359 56 802 029, fax: +359 56 801 225 |
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