24696 - Carvajal II

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Summary of Proposed Investment

Project Number

24696

Company Name

CARVAJAL S A

Date SPI Disclosed

Apr 27, 2006

Country

Colombia

Industry

Agribusiness and Forestry

Projected Board Date

May 29, 2006

Status

Completed

Sector

Paper for Printing and Writing

Department

Gbl Ind, Manufact, Agribus & Services

Environmental Category

B - Limited

Previous Events

Approved : Jun 9, 2006
Signed : Jun 16, 2006
Invested : May 28, 2009

Project Description

Carvajal Group or the company is a leading privately-owned Colombian conglomerate founded in 1904, whose core business lines are:

- paper manufacturing and conversion;
- school and office supplies; phone directories;
- plastic & paper packaging; and
- book and textbook editing and publishing, printing of books, and printing of office forms.
The company is headquartered in Cali, Colombia and has operations across 14 sectors in 18 countries in Latin America, the United States and Spain.

The project consists of the company’s 4-year modernization and expansion program, which began in 2003, and a program to modernize its information system by implementing an Oracle Enterprise Resource Planning System (ERP) across the company. The project will enable the company to become a leader in its core business lines and achieve international competitiveness.

Sponsor / Cost / Location

Product Line	IFC Investment (million USD)
Risk Management
Guarantee
Loan	50.0
Equity

Development Impact

The project will allow the company to benefit from lower costs associated with better technologies and economies of scale. ERP will provide additional cost reduction and efficiency improvements. The benefits from the project are expected to accrue to:

- shareholders in the form of higher profits;
- labor through new knowledge and working experience, and more productive jobs and salaries;
- consumers from better, competitively priced products and services; and
- government through taxes.

IFC will provide dual currency funding, in local currency and US dollar, with a long maturity of 12 years, to support the company’s strategic plan and to allow it to better manage its foreign exchange exposure. The long maturity debt that IFC would provide is not readily available locally in local currency or US dollars.

The project 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 or which can be avoided or mitigated by adhering to generally recognized performance standards, guidelines or design criteria. The following environmental, health, and safety issues were analyzed:

- health, safety and environmental management;
- air and water emissions;
- hazardous materials management;
- community development and social programs.
Location of environmental documents In locally affected community
Environmental documents will be made available at the following locations:

On the company website www.carvajal.com.co and
At the company’s headquarters
Carvajal S.A.,
Calle 29 Norte 6A-40,
Cali, Colombia –
(copies will also be kept at the security office of Carvajal).

Contacts

For Inquiries About the Project, Contact

Oscar Rivera, Chief Financial Officer
Carvajal S.A.
Calle 29 Norte 6A-40
Cali, Colombia

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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