24017 - Bosnalijek expan

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Summary of Proposed Investment

Project Number

24017

Company Name

Bosnalijek d.d.

Date SPI Disclosed

Feb 25, 2005

Country

Bosnia and Herzegovina

Industry

Health, Education and Life Sciences

Projected Board Date

Mar 29, 2005

Status

Completed

Sector

Pharmaceuticals and Medicine

Department

Regional Industry MAS LAC & EUR

Environmental Category

B - Limited

Previous Events

Approved : May 16, 2005
Signed : Jun 13, 2005
Invested : Jun 30, 2005

Project Description

Bosnalijek d.d. Sarajevo (Bosnalijek or the company), an existing IFC client, is the largest pharmaceutical company in Bosnia and Herzegovina (BiH) is implementing a Euro 18.5 million project to construct a Production-Distribution Center. The PDC will consist of the two connected entities:-

- a line for production of solid form drugs, which will increase the present capacity from 200 million tablets p.a. to 768 million tablets p.a., and

- a warehouse area of approximately 5,000 sq.m. Construction of the PDC started during summer 2004 and is expected to be completed by end of 2006.

Sponsor / Cost / Location

Product Line	IFC Investment (million USD)
Risk Management
Guarantee
Loan	9.59
Equity

Development Impact

Being a producer of generic pharmaceutical products with a dominant position on the market, Bosnalijek’s contributes towards more affordable and better quality health care. With this investment, it will be able to increase variety of domestically produced drugs and replace more expensive imported medication. Consumers will pay less for a comparable quality medicine, the amount equal to custom duties on imported products. Developmental impact extends beyond the health care system; being one of the most successful local companies, Bosnalijek represents a stable source of government income and plays a role model for other public companies in the country. Expansion brought about by the project is expected to almost double sales of the company by 2014 and, hence, increase government’s tax revenue.
The project will also contribute to a cleaner environment through treatment of all process waste water. The company’s adherence to stringent IFC environmental and social policies will set a good example for other companies to follow. IFC has also a strong role in supporting the project by providing much needed long-term affordable financing and a technical expertise.

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 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 press release will be on March 1, 2005 in the Sarajevo daily newspaper “Oslobodzanga.”
The company will also make the disclosure at Bosnalijek city lights located on three tram stations in Sarajevo for 30 days starting from March 1, 2005.

Contacts

For Inquiries About the Project, Contact

Mr. Edin Arslanagic
General Manager
71000 Sarajevo, Jukiceva 55,
Bosnia and Herzegovina

This Summary of Project Information (SPI) is prepared and distributed to the public in advance of the IFC Board of Directors' consideration of the proposed transaction. Its purpose is to enhance the transparency of IFC's activities, and this document should not be construed as presuming the outcome of the Board decision. Board dates are estimates only. The following SPI is disclosed in accordance with IFC's Disclosure of Information Policy that went into effect September 1998.

The map is for illustrative purposes and does not imply the expression of any opinion on the part of the World Bank, concerning the legal status of any country or territory or concerning the delimitation of frontiers or boundaries. Country borders or names do not necessarily reflect the World Bank Group's official position. In some cases, available project location information is limited to the country of the project's activities. Locations are approximate.

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