Summary of Proposed Investment
Project Number
11620
Company Name
DEXCO SA
Date SPI Disclosed
Jul 16, 2002
Country
Brazil
Industry
Agribusiness and Forestry
Projected Board Date
Aug 30, 2002
Status
Completed
Sector
Wood Panels and Engineered Wood Products
Department
Regional Industry MAS LAC & EUR
Environmental Category
B - Limited
Previous Events
Approved : Oct 9, 2002
Signed : Jan 6, 2003
Invested : Apr 1, 2003
Project Description
Satipel, a medium-sized, family-owned company, is one of Brazil''s leading manufacturers of particleboard. In 2001, the company produced 490,000 m3 of particleboard in 2001. The proposed project will: refinance existing debt; make minor maintenance investments; finance environmental upgrades; and further invest in plantations.
IFC Role
IFC has three important roles to play in this project. First, IFC will provide the necessary term financing for a medium-sized Brazilian company. The Brazilian economic crisis, the political uncertainty stemming from the upcoming presidential election, the current crisis in Argentina, and the September 11 events in the United States, have made long-term financing difficult to obtain for Brazilian companies. The dearth of such financing has been a major constraint for the development of the private sector, hampering modernization and employment growth in Brazil''s economy. Under current conditions, both in international and domestic Brazilian financial markets, even large firms have difficult access to long term financing, driving a substantial consolidation in various industries. The only way for a commercially viable and otherwise efficient mid-size firm, such as Satipel, to compete is through the support of sources such as IFC. Second, the IFC investment would introduce Satipel to international lending that would enhance its visibility and credibility preparing the company to go public in the next few years. Indeed, Satipel management intends to turn this family business into a large profitable public company. The owners have indicated their strong desire to have IFC as a “partner” in order to increase the chance of success of the company’s upcoming initial public offering. Last, IFC''s involvement would support an environmentally-sound-wood-products company.
Development Impact
The proposed investment would improve the operating efficiency of a medium-sized enterprise. Furthermore, the project will assist the country in maximizing its comparative advantage in the forestry products. Satipel utilizes low cost plantation pine and helps consumers avoid the high transportation costs associated with imports. In addition, as part of the company’s investments in the forestry operations, Satipel will provide financing to local farmers to introduce them to the forestry operations. The program is expected to reach more than 20 farmers, and a total of 500 ha. per year. The company will provide the seedlings and extensive training to the farmers. The farmers will benefit from the use of non-adequate land for agriculture, diversifying their activities, taking advantage of the use of current labor, and thus, increasing their annual revenues from the use of the land.
IFC Role
IFC has three important roles to play in this project. First, IFC will provide the necessary term financing for a medium-sized Brazilian company. The Brazilian economic crisis, the political uncertainty stemming from the upcoming presidential election, the current crisis in Argentina, and the September 11 events in the United States, have made long-term financing difficult to obtain for Brazilian companies. The dearth of such financing has been a major constraint for the development of the private sector, hampering modernization and employment growth in Brazil''s economy. Under current conditions, both in international and domestic Brazilian financial markets, even large firms have difficult access to long term financing, driving a substantial consolidation in various industries. The only way for a commercially viable and otherwise efficient mid-size firm, such as Satipel, to compete is through the support of sources such as IFC. Second, the IFC investment would introduce Satipel to international lending that would enhance its visibility and credibility preparing the company to go public in the next few years. Indeed, Satipel management intends to turn this family business into a large profitable public company. The owners have indicated their strong desire to have IFC as a “partner” in order to increase the chance of success of the company’s upcoming initial public offering. Last, IFC''s involvement would support an environmentally-sound-wood-products company.
Development Impact
The proposed investment would improve the operating efficiency of a medium-sized enterprise. Furthermore, the project will assist the country in maximizing its comparative advantage in the forestry products. Satipel utilizes low cost plantation pine and helps consumers avoid the high transportation costs associated with imports. In addition, as part of the company’s investments in the forestry operations, Satipel will provide financing to local farmers to introduce them to the forestry operations. The program is expected to reach more than 20 farmers, and a total of 500 ha. per year. The company will provide the seedlings and extensive training to the farmers. The farmers will benefit from the use of non-adequate land for agriculture, diversifying their activities, taking advantage of the use of current labor, and thus, increasing their annual revenues from the use of the land.
Sponsor / Cost / Location
Development Impact
Related ESRS/ERS
Contacts
For Inquiries About the Project, Contact
Mr. Laercio Lessa
CFO, Satipel Industrial S.A.
Rua Moyses de Kahan 216, Sao Paulo, SP - Brazil (01139-040)
Email: laercio.lessa@satipel.com.br
CFO, Satipel Industrial S.A.
Rua Moyses de Kahan 216, Sao Paulo, SP - Brazil (01139-040)
Email: laercio.lessa@satipel.com.br