Summary of Proposed Investment
Project Number
10600
Company Name
IKEA INDASTRI TIKHVIN, OOO
Date SPI Disclosed
Jun 27, 2001
Country
Russian Federation
Industry
Agribusiness and Forestry
Projected Board Date
Jul 31, 2001
Status
Completed
Sector
Furniture and Related Products
Department
Regional Industry MAS LAC & EUR
Environmental Category
B - Limited
Previous Events
Approved : Nov 1, 2001
Signed : Mar 1, 2002
Invested : Apr 25, 2002
Project Description
The project consists of the construction and operation of a greenfield, vertically integrated furniture component operation with an annual capacity for wood harvesting of up to 250,000 m3, sawmilling of up to 150,000 m3, and furniture component production of up to 24,000 m3. The plant''s production, to be made of both birch and pine, and eventually also spruce, will be designed specifically to fit into IKEA''s global supply structure, and to complement IKEA''s existing network of Russian suppliers. In addition, IFC and Swedwood are considering the implementation of a technical assistance (TA) program to improve the sustainability of the company''s operations, including training of local forest operators that would eventually supply the plant. The project represents the initial step in Swedwood''s long-term strategy to create its first integrated production base for furniture manufacturing in Russia.
The project is expected to have a significant development impact by increasing the economic value of the forest resources of the Leningrad region, which are currently under-utilized, and by conducting sustainable forestry practices in the project area. It will also provide direct employment to approximately 425 people in a remote area, to be considerably expanded in the long term. The sponsor will allocate substantial resources to training, similar to its other production facilities in Eastern Europe. Indirectly, the local business community will benefit from the project as a nucleus for regional development. Further, the implementation of the proposed TA program is expected to result in long-term contracts for local companies to supply Swedwood, which will create stable revenues and employment opportunities.
IFC''s role in this project is to provide comfort to the sponsor in its first investment in the Russian forestry sector. IFC will also have a strong role in mobilizing financial and technical resources to build up the capabilities of local forest operators and contribute to improving the business climate in the forestry sector.
The project is expected to have a significant development impact by increasing the economic value of the forest resources of the Leningrad region, which are currently under-utilized, and by conducting sustainable forestry practices in the project area. It will also provide direct employment to approximately 425 people in a remote area, to be considerably expanded in the long term. The sponsor will allocate substantial resources to training, similar to its other production facilities in Eastern Europe. Indirectly, the local business community will benefit from the project as a nucleus for regional development. Further, the implementation of the proposed TA program is expected to result in long-term contracts for local companies to supply Swedwood, which will create stable revenues and employment opportunities.
IFC''s role in this project is to provide comfort to the sponsor in its first investment in the Russian forestry sector. IFC will also have a strong role in mobilizing financial and technical resources to build up the capabilities of local forest operators and contribute to improving the business climate in the forestry sector.
Sponsor / Cost / Location
Development Impact
Related ESRS/ERS
Contacts
For Inquiries About the Project, Contact
Kristen Fenster, Investment Officer
E-mail: kfenster@ifc.org
E-mail: kfenster@ifc.org