Press Releases

IFC Supports Expansion, Modernization of Key Croatian Manufacturer with up to 22.9 Million Euros in Funding

Afshin Molavi
Phone:(202) 458-5674

Fax:(202) 974-4384


Washington, DC, September 03, 2002—The International Finance Corporation, the private sector development arm of the World Bank, will mobilize up to 22.9 million Euros in funding to support the expansion and modernization of a leading Croatian packaging paper and materials manufacturer.  The IFC investment will help Belisce d.d to improve its operational efficiency, acquire a regional paper company, increase annual production, and refinance existing debt.

The proposed project totaling 45.7 million Euros is aimed at increasing Belisce’s potential as a regional player in the paper and pulp industry in Central Europe.  Belisce has already taken steps to acquire Valkarton d.d, a well established paper converting company in Slovenia with a subsidiary in FYR Macedonia.  Belisce issued corporate bonds to help bridge finance the Valkarton acquisition, the first time such bonds have been issued in Croatia. The Valkarton acquisition also marks the first significant investment by a Croatian private company in Slovenia.

The IFC investment will consist of a loan of up to 10 million Euros for IFC’s own account and a syndicated loan of up to 12.9 million Euros for the account of participating banks.

The project will create several positive outcomes for Belisce, including: reduced transport costs on overseas exports; increased production efficiency through redistributing and optimizing production; cost saving through joint procurement of raw materials and reducing relative overheads; increased paper production capacity and efficiency; improvement of Belisce’s position in the Croatian capital markets through the corporate bond issue; and a significant positive impact on the environmental aspects of current operations.

Belisce currently has a 40 percent market share in Croatia.  The company has been in the wood processing business for 118 years, and for the last 40 years in chemical and mechanical wood pulp production and sales of packaging paper and corrugated products.  The project will help to create new jobs both directly and indirectly.  The company, located on the Drava River in a heavily forested area near the Hungarian and Serbian borders, has been a key employer in the region.

Khosrow Zamani, IFC’s Director for Southern Europe and Central Asia, said: “This investment will help a strategically important Croatian company grow into a regional industry leader.  Croatia needs key manufacturers like Belisce to expand and modernize in order to remain competitive and thereby contribute to the country’s private sector development.”  Mr. Zamani noted that IFC has previously financed three major expansion projects with Belisce (in 1973, 1980, and 1997) and has played a significant role in developing the company.  He added: “Our long experience with Belisce gives us the confidence that the company will effectively meet the challenges that lie ahead in this expansion phase and we look forward to helping Belisce achieve its full potential.”

IFC’s mission is to promote sustainable private sector investment in developing countries, helping to reduce poverty and improve people's lives.  IFC finances private sector investments in the developing world, mobilizes capital in the international financial markets, and provides technical assistance and advice to governments and businesses.  Since its founding in 1956 through the close of the last fiscal year on June 30, 2002, IFC committed more than $34 billion of its own funds and arranged $21 billion in syndications for 2,825 companies in 140 developing countries.  IFC’s committed portfolio at the end of FY02 was $15.1 billion for our own account and $6.5 billion held for participants in loan syndications.

Vedran Antoljak
Phone:385-1 2357 236
Fax:385-1 2357 200