Magic Box is owned 100% by Mr. Muamer Akkaya, a Turkish national. Mr. Muammer Akkaya has a background in media, having studied communications. He has been in the printing business for the past fifteen years, setting up his first print house in Turkey, then in 2000 in Kyrgyzstan where he relocated and established Mega Media print house located in the Kyrgyz-Turkish University of Manas. In 2004, Mr. Akkaya established Magic Box to diversify into cardboard packaging and label printing. Magic Box is located in the Free Economic Zone in Bishkek. Magic Box will be currently doubling its cardboard and label paper processing capacity of 3,000 tons per annum through this new expansion to take advantage of the growth in the packaging market in Central Asia.

The total project cost is estimated at $2.6 million. The proposed IFC financing consists of an A Loan in the amount of $1.3 million for its own account.

1.50 million (USD)

Product Line	IFC Investment (million USD)
Risk Management
Guarantee
Loan	1.50
Equity

* These investment figures are indicative

The project is located in the Bishkek Free Economic Zone, in Ak-Chyi village, about half an hour away from Bishkek. The Zone was created by the Government with suitable road, power, water and security infrastructure, and houses several light industrial companies. The project investment will be located within the current facilities already owned by the company, with some additional space to be built.

The project is expected to generate up to 30 additional jobs. It will help promote import substitution in cardboard packaging, a high value-added industry, and help develop a Kyrgyz company into a regional player by building its export capacity. The project will also help demonstrate IFC’s ability to assist SMEs expand their operations in the Kyrgyz Republic, giving confidence to other investors, both foreign and local to expand their businesses. In particular, the project will encourage foreign direct investment through the example of a Turkish entrepreneur who decided to relocate his operations into the Kyrgyz Republic.

IFC’s participation in the project provides longer term financing which is not available in sufficient volumes from local banks. IFC’s involvement also provides confidence to the local business community that local companies (albeit in this case, foreign owned) can operate at levels warranting international investment. IFC’s involvement will also assist the company in the areas of corporate governance and environmental standards.

This project has been categorized as B following appraisal per the new IFC’s Environmental and Social Review Procedure (ESRP). Environmental, social, health and safety issues associated with this project include:

- Corporate capacity in environmental and social management;
- Air emissions and dust control;
- Liquid waste treatment and disposal;
- Hazardous materials storage and handling on site;
- Solid and hazardous waste management and disposal;
- Housekeeping and Occupational health and safety management; and
- Employee safety and training and emergency response.

The Magic Box owner has endorsed all findings, management recommendations, and subsequent studies suggestions discussed during appraisal.

Performance standards applicable for this investment may, therefore, include:

- PS1: Social and Environmental Assessment and Management System;
- PS2: Labor and Working Conditions;
- PS3: Pollution Prevention and Abatement; and
- PS4: Community Health Safety and Security.

There is no land acquisition nor involuntary resettlement, and no impact on indigenous people or cultural property under the project, nor is it expected to have any impacts on natural habitats, forests, or protected or sensitive areas.

Based on the review of the information provided, face-to-face discussions with the client and review of regulatory documents signed by the local and regional administration, this project will have limited potential adverse environmental and social impacts. Also any impacts will be few in number, site-specific, reversible and easily addressed through agreed mitigation measures.

Further details are provided in the Environmental and Social Review Summary available separately with this document as well as on IFC’s website.