Cartones América S.A. (incorporated in Cali, Colombia) directly and indirectly wholly-owns all the companies of the Group. Cartones América is a privately held company which is majority owned (69.8%) by a Colombian family which has been dedicated to the packaging industry for more than 40 years. Citicorp International Finance Corporation is the most important minority shareholder (29.5%) with the balance held by former and current employees (0.7%).

The total project cost is estimated at up to $44 million. IFC is considering extending an A loan for its own account of up to $22 million to CAME, of which up to $5 million could be a quasi-equity instrument. About one-half of the project cost would be allocated to debt refinancing which will extend CAME’s debt maturities, improving its credit profile and strengthening its balance sheet. The balance of the project cost is comprised of investments in operational improvements, environmental upgrades and working capital that is aimed at enhancing CAME’s competitiveness and further reducing its impact on the environment. The most significant of these investments is for a cogeneration plant in Cali, estimated to cost up to $6 million. Other investments include a new printing machine in Ecuador and upgrades in environmental controls at plants in each of the countries CAME operates in

22.0 million (USD)

Product Line	IFC Investment (million USD)
Risk Management
Guarantee
Loan	22.0
Equity

* These investment figures are indicative

CAME operates paper mills in Cali (Colombia) and Chincha (Peru). In addition, it operates corrugating and box making operations in Cali and Mosquera (Colombia), Lurin (Peru), as well as near Valencia (Venezuela), and Quito (Ecuador). The two plants in Cali are separate sites within the urban area of the city. The other sites are all located in industrial parks situated on the edge of cities. Some portion of the capital investment comprising the project is allocated for each of these sites. The most significant investment, a cogeneration plant, would be installed at the paper mill site in Cali.

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.
Location of environmental documents in locally affected community
The environmental documents and ERS will be made available in the following locations: ECUADOR - Quito - Cartelera Mercado Mayorista COLOMBIA - Cali - Cartelera en la Parroquia de la Junta de Acción Comunal Barrio Brisas de los Alamos COLOMBIA - Mosquera - Iglesia de Mosquera PERU - Chincha - Cartelera Municipalidad Chincha Baja PERU - Lurin - Cartelera Centro Industrial VENEZUELA - Guaccara - Cartelera Zona Industrial El Nepe

IFC’s support for CAME will support the Company’s drive to become more efficient and competitive. Impacts on economic development in Colombia are given below. - Strengthening a non-traditional industrial activity to enhance the country’s economic diversification. - Employment Impact- CAME employs nearly 600 people directly. Further, indirectly its operations support the activities of 40 recycled paper collection companies in the Andean Region which employ 800 people directly and an estimated 8,000 indirectly. In Bogotá, CAME is participating in a program with the municipality to build recycled waste collection centers which are operated by street collectors. - Community Development:- CAME actively supports its workers in home purchase. More than 90% of its workers in Cali are homeowners, and it has been implementing the same program for employees at its companies in Ecuador and Peru. CAME has also supported the formation of SMEs in service areas including transportation, maintenance and production of labor intensive items such as dividers. Finally, CAME invests in training at all levels. Its policy is to cover 50% of the cost of educational programs attended by its employees, and many of its employees have acquired technical, university and masters degrees. - Environmentally Friendly.- CAME’s mills use recycled waste as it main raw material. The Group has invested in technology to permit the utilization of lower grades of recycled fibers. They have also made investments to substitute boiler fuel from diesel to natural gas and to increase water consumption efficiency. IFC’s role in the project has the three aspects outlined below. - Access to Long-term Financing.- Recession, liquidity constraints in the domestic banking sector, struggles with narco-terrorist activity, and Colombia’s loss of its investment grade rating have severely constrained access to long-term credit, even for strong credits such as CAME. Many foreign commercial banks have left the Colombian market or conduct short-term trade financing only and IFC remains one of few long-term sources of financing for independent companies. - Catalytic Role.- Given the situation described above, CAME’s current lenders would not be able to extend the maturities of their current loan exposures in individually. However, with IFC taking a lead by extending a loan of up to 9 years maturity, some of these banks have indicated that on the basis of an improved debt maturity profile, they will be able to increase the final maturity of some of their current loans to CAME from about 2-3 years to about 7 years. - Value-Added for next Stage of Corporate Development. Historically a family-owned company, CAME is rising through the ranks of middle market companies to become a more significant regional player. Its next stage of development may include geographic diversification into Central America and the Caribbean and a potential linking with an industrial partner. The company may be able to leverage IFC’s ties in the industry and its experience in neighboring markets to support the pursuit of these objectives. - Support for Cross-Border Operation. IFC’s support for CAME is consistent with the objectives of the governments of the Andean Region to promote cross-border business and financial synergies. In particular, IFC’s engagement is important in backing the Group’s operations in Venezuela, where CAME has extremely limited financing options due to the recent crises.