FV is an Argentinean company, privately-held by the Viegener family. Four brothers, descendants of the founder, hold 70.8% of the company’s shares. The balance is held by other members of the extended family.

The project cost is estimated at about $40 million for the next two to three years. The investment program would be financed by an IFC Loan (up to $20 million) and FV’s internal cash generation.

20.0 million (USD)

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

* These investment figures are indicative

FV products are mainly produced at the plant located in Villa Rosa, in the Municipality of Pilar, Buenos Aires province, about 60 km from Buenos Aires. The company’s headquarters are located in Florida, just outside of Buenos Aires.

- Raise industry standards and improve sustainability:

FV’s expansion program is expected to have a catalytic effect in developing and improving the quality and environmental sustainability of local suppliers and producers. Additionally, it is expected that the small companies acquired by FV will benefit from introduction by FV of good and prudent managerial and operational practices and its well established distribution network.

- Expansion of Argentine export base:

FV’s ability to increase export is dependent on the proposed project, as the plants are now working at almost full capacity and are mainly sourcing the local market. In addition, the project includes the necessary investment to enhance FV’s presence in export markets. Finally, the production facilities’ upgrade and increased economies of scale will improve FV’s competitive position and enhance its export possibilities.

- Job creation:

FV’s expansion is expected to create about 200 new job positions within the company and about 500 indirect jobs in the supply chain. Because of the importance of design, as well as level of quality and consistency required for the manufacturing process, many of these jobs will be of highly skilled nature.

- Creation of consumer surplus:

FV’s cost optimization is expected to eventually translate into relatively lower prices to end users, primarily within the construction sector. Lower prices for building materials will benefit the housing sector.

- Long-term/ structured financing:

Despite its strong balance sheet and profitability, FV has no access to the long-term financing required to implement its expansion investment program. Furthermore, IFC could provide a significant portion (the A Loan) in local currency at a maturity that is not available in the market. This is especially important to FV as the company will continue to have a significant portion of its sales denominated in local currency despite the expected increase in exports as a result of the Project.

- South-South expansion:

IFC would further support the internationalization of the company’s operations, expanding FV’s customer base and geographical reach to other emerging markets. Through its market knowledge and local presence in Latin America, IFC would support the company’s effort to become one of the leading metal fixture producers in the Southern cone.

- Cleaner production/energy efficiency:

IFC would explore further assistance through IFC’s Cleaner Production program, which could be two fold. Firstly, through the coordination and partially funding a professional study to:

- identify energy efficiency projects in its existing operations to reduce energy usage, and
- to investigate low-cost, reliable energy supply options.

Secondly, by additional financing under IFC’s CP lending pilot to implement such projects.

This is a Category B project according to IFC’s Procedure for Environmental and Social Review of Projects because, as a result of its due diligence, IFC has concluded that the potential adverse environmental and social impacts presented by the project are few in number, site-specific and have been or can be readily mitigated by adhering to generally recognized performance standards, guidelines or design criteria.

Key issues reviewed during appraisal include:

- assessment and management of environmental, health and safety, and social performance associated with the existing manufacturing operations and at corporate level;
- labor and working conditions, including provision of a safe working conditions for direct and contracted employees;
- management of air emissions and process effluents to the environment from manufacturing processes, hazardous and solid waste management, and carrying capacity of the local environment; and
- host community safety and impacts from existing and proposed operations and community engagement.

While all Performance Standards (PS) are applicable to this investment, IFC’s environmental and social due diligence indicates that the investment may have impacts that must be managed in a manner consistent with the following Performance Standards:

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