Cartones America S.A. is a leading privately-owned, Andean Region manufacturer of containerboard, corrugated boxes, clay-coated paperboard, spiral tube board and specialty board packaging products. The Group traces its roots back to the 1950s in Cali, Colombia. In recent years, the Company has grown steadily, investing in operations in Venezuela, Ecuador, Peru and Chile. CAME is in an important phase of its development and the project is aimed at helping CAME consolidate recent investments and realize the synergies to be achieved in its operations across the Andean Region. Cartones América S.A. (incorporated in Cali, Colombia) is the holding company of the Group and holds directly or indirectly 100% of the operating subsidiaries in Peru, Venezuela and Ecuador and 60% of its subsidiary in Chile. It is majority owned by the Pacini family (the sponsor) and CAOBA Capital.

The total project cost is estimated to be $50 million. IFC is considering providing debt of up to $20 million of which $5 million would be quasi-equity.

20.0 million (USD)

Product Line	IFC Investment (million USD)
Risk Management
Guarantee
Loan	20.0
Equity

* These investment figures are indicative

CAME operates paper mills in Cali, Colombia and Chincha, Peru. In addition, it operates corrugated and box making operations in Cali and Mosquera, Colombia, Lurin, Peru, Valencia, Venezuela, Quito, Ecuador, as well as Peñaflor, Chile. 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 the cities, or in a rural area in the case of Chile. Some portion of the capital investment comprising the project is allocated for each of these sites.

- Employment Impact: CAME currently employs 731 people, in its production facilities. Besides the people employed in its plants, CAME's operations support the activities of over 40 recycled paper collection companies in the Andean Region which employ around 800 people directly and an estimated 8000 indirectly. Further, in Bogota, CAME participates in a program with the municipality to build several recycled waste centers that will be operated by street collectors. It is estimated that the increase in the purchase of recycled waste paper in all of the Andean Region will also create some additional 1500 jobs indirectly. - Community Development:  CAME actively supports its workers in home purchase; more than 90 percent of its workers in Cali are homeowners, and it is implementing the same program for employees at its companies in Ecuador, Venezuela 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. - Environmentally Friendly: CAME’s mills use recycled waste as its 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 fuel oil to natural gas and to increase water consumption efficiency.

- Support and value added for a growing company: Through the new project, IFC will continue to support the Company as it embarks on a significant strategic initiative, building further on its growth path. IFC will enable the Company to undertake its strategic plans, while also further strengthening its balance sheet, giving it sufficient room for growth. - Long term financing: Long term financing for second tier companies, both in Colombia and in CAME’s other countries of operation, is limited. The 9-year IFC investment, with a long grace period for principal payments, will give CAME the breathing room to integrate its recent acquisition and implement its capacity upgrades. - Support for cross border operations: In structuring a multi-country facility for the Group, IFC’s role would be extended beyond Colombia to the countries in which CAME has operations, helping to promote cross-border business and financial synergies.

This is a Category B project according to IFC''s Procedure for Environmental and Social Review of Projects. The limited environmental and social impacts that the project may be generated will be avoided or mitigated by CAME adhering to the IFC performance standards and guidelines and by implementing specific corrective actions identified at appraisal. The company has environmental and social management systems in place, has a clear policy of water consumption and effluent reduction, as well as use of cleaner fuels (natural gas) and reuse of residues. It also has a strong social projection to the nearby communities by supporting and sponsoring paper recycling initiatives which typically take place among economically deprived communities.