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.