27031 - Latapack

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Summary of Proposed Investment

Project Number

27031

Company Name

Latapack-Ball Embalagens Ltda.

Date SPI Disclosed

Jun 18, 2008

Country

Brazil

Industry

Manufacturing

Projected Board Date

Jul 18, 2008

Status

Completed

Sector

Metal Can and Other Metal Container (Including Aluminum Beverage Cans)

Department

Gbl Ind, Manufact, Agribus & Services

Environmental Category

B - Limited

Previous Events

Approved : Aug 27, 2008
Signed : Oct 3, 2008
Invested : Nov 12, 2008

Project Description

Latapack-Ball Embalagens Ltda (Latapack or the company) is an established Brazilian manufacturer of aluminum beverage cans. Founded in 1995, Latapack has two production facilities: one in the city of Jacareí, Sao Paulo state, and the other in the city of Simoes Filho, in the frontier-region state of Bahia. Responding to the demands of the rapidly-growing Brazilian beverage can market, Latapack plans to build a new production facility and to increase the capacity of its existing plants.

Sponsor / Cost / Location

Product Line	IFC Investment (million USD)
Risk Management
Guarantee
Loan	25.0
Equity

Development Impact

Supporting competitive domestic market leader with operations in a frontier region of Brazil/Employment Creation:

The project will support a Brazilian manufacturer of competitive products. The investment program contemplates the modernization and expansion of Latapack’s Bahia plant and is expected to result in increased employment in the area. The construction of a new facility in Três Rios contemplated by the investment program is also expected to bring additional employment, training and supply linkage opportunities to the local population, as well as temporary employment opportunities during the construction phase. In total, the project is expected to create approximately 100 direct jobs and 400 indirectly.

Strengthening of a sector with higher value addition:

Brazil’s economy is known for its competitiveness in raw materials and agricultural products. However, in most cases, the initial production stages remain in the country, whereas other stages, in which value is added to the product, are conducted in other countries. Typical examples are soybean and coffee, which are produced very competitively in Brazil, but are most frequently industrialized abroad. Latapack makes beverage cans from aluminum, adding to the raw material value that remains in the country and helping develop the relevant local expertise and technology.

Supporting the upgrades of facilities using state of the art, energy efficient manufacturing standards:

The project will support a manufacturer that uses most modern, environmentally-friendly technologies and processes.

Facilitating access to long-term financing:

Although access to long-term financing for larger Brazilian companies has improved in recent years, Latapack, like most mid-sized Brazilian companies, continues to face difficulties in sourcing appropriate financing due to the high cost of short term funding and the limited availability of long-term financing locally. Further, as Latapack sells most of its products in the domestic market, it is not able to secure easily trade finance lines on favorable terms. IFC will provide Latapack with long-term funding at an appropriate cost, broadening the cmpany’s sources of long-term financing and helping Latapack reduce financial risk in a volatile environment.

Resource Mobilization:

Increased market volatility in the financial markets due to contagion from the sub-prime crisis in the US is negatively impacting Latapack’s ability to raise long-term financing for its investment program. With its longer-term outlook and track record, IFC’s syndication program will provide comfort for international banks to offer much needed long-term financing to Latapack.

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 social impacts may result which can be avoided or mitigated by adhering to generally recognized performance standards, guidelines or design criteria.

Key environment, health and safety and social aspect of the project which were analyzed during IFC’s review were:

- Environmental, social, and health and safety management systems;

- Labor and working conditions;

- Pollution prevention and abatement, including, wastewater disposal, solid and hazardous waste management, other utility usage and energy use management;

- Community health, safety and security, including life and fire safety of nearby communities and interaction with local communities;

- Land acquisition, site location, planning, and permitting.

Contacts

For Inquiries About the Project, Contact

Jorge Angel Rosa Garcia, CFO
Rua do Rocio, 199 – 7º andar
Sao Paulo, SP – Brazil
04552-000

Phone: + 55 11 2171-2423
Facsímile: +55 11 2171-2401
jangel@latapack.com.br

For Inquiries and Comments About IFC, Contact

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2121 Pennsylvania Avenue, NW
Washington DC 20433
Telephone: 202-473-3800
Fax: 202-974-4384
E Mail: Webmaster

Local Access of Project Documentation

Environmental documentation will be made available at the following locations:

Latapack’s Main Office
Rua do Rocio, 199 – 7º andar
Sao Paulo, SP – Brazil
04552-000

Jacareí Plant
Rodovia Geraldo Scavone, n.º 2400 - Jardim Califórnia
CEP.: 12305-490 - Jacareí SP

Bahia Plant
Via Ipitanga n.º 468 - Cia Sul
CEP.: 43780-000 - Simões Filho - BA

Três Rios City Hall
Praça Sebastião, 81 – Centro
Três Rios – RJ
25804-080

This Summary of Proposed Investment is prepared and distributed to the public in advance of the IFC Board of Directors' consideration of the proposed transaction. It is not an offer of shares to the public and is intended solely to enhance the transparency of IFC’s activities. 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 Policy on Disclosure of Information that went into effect April 30, 2006.

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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