PROJECT

Projects

Summary of Proposed Investment

Project Number

7333

Company Name

DEXCO SA

Date SPI Disclosed

Feb 28, 1996

Country

Brazil

Industry

Agribusiness and Forestry

Status

Completed

Sector

Wood Panels and Engineered Wood Products

Department

Gbl Ind, Manufact, Agribus & Services

Environmental Category

B - Limited

Previous Events

Approved : May 7, 1996
Signed : Dec 19, 1996

Project Description

Summary Of Project Information (SPI)

Project NameBrazil-Duratex S.A. II (“Duratex”)
RegionLatin America and Caribbean
Sector
Project No007333
Projected Board DateMarch 28, 1996
Company NameDuratex S.A. (“Duratex”)
Technical Partner and/or Major Shareholders

Duratex S.A. is a publicly traded company with 3.1 billion common shares and 6.2 billion preferred shares. Itaúsa, the controlling shareholder, owns 78.4% of the voting shares and 21.5% of the preferred shares. The public holds the remaining 21.6% of the voting shares and 78.5% of the preferred shares. Itaúsa, a prominent Brazilian group has interests in the financial (Banco Itaú), insurance (Itaú Seguros), building materials (Duratex), chemicals (Elekeiroz), and electronics (Philco Itautec) sectors.

Project Cost Including proposed IFC investment

Approximately US$305 million three-year investment program with an IFC investment of about US$80 million, of which US$30 million is for IFC’s own account and US$50 million is for the account of participant banks.

Location of project and Description of site

The head office is located in São Paulo in Brazil. It has ten existing industrial units in Brazil(two hardboard plants located in Botucatu and Jundiaí in the state of São Paulo, three particleboard plants located in Itapetininga, Gravataí and Agudos (the latter will be the site of the greenfield medium density fiberboard plant) in the state of São Paulo, two brass fixtures plants in São Paulo and Jundiaí in the state of São Paulo, and two vitreous china plants, one in Jundiaí in the state of São Paulo and one in São Leopoldo in the state of Rio Grande do Sul) one hardboard plant in Germany and one brass fixtures plant in Argentina (which will also be the site of the new vitreous china operations). The Company has 188,000 planted acres of pine and eucalyptus forest reserves in the states of Sao Paulo, Rio Grande do Sul and Bahia. Its total area with forests and native vegetation is 267,000 acres.

Description of Company and Purpose of Project

Duratex S.A., formed in 1951, is a leading wood-based panel producer in Brazil with a particle board nominal capacity of 340 thousand m3 per year and a hardboard nominal capacity of 370 thousand m3 per year. Duratex is also a leading producer of brass bathroom fixtures and vitreous china products. The purpose of the investment program is threefold: (a) the establishment of Brazil’s first medium density fiberboard plant will allow Duratex to meet Brazil’s growing demand of wood products for furniture, civil construction and other applications using plantation-based, fast-growing wood products in place of non-plantation, environmentally sensitive wood products; (b) the modernization and debottlenecking investments in the existing vitreous china, brass fixtures, particleboard, hardboard and forestry operations will allow the Company to maintain its competitiveness in these areas; and (c) the expansion of the vitreous china, brass fixtures and particle board operations will allow the Company to maintain market share given the expected growth conditions for these sectors.     

Environmental Category and Issues

This is a category B project according to IFC’s environmental review procedure. Environmental and occupational health and safety issues associated with this project include: liquid effluents, air emissions, solid waste disposal, wood supply and worker exposure to aerosols, dust and fumes. IFC’s Environment Division has concluded (based on IFC’s Technical and Environmental Department’s site visits and review of environmental audits prepared by the Company) that: the completion of the Jundiaí municipal wastewater treatment system is on an appropriate schedule for providing acceptable treatment to the wastewater from the Jundiaí hardboard plant. Furthermore, Duratex has met the expected pretreatment requirements for discharge to the Jundiaí municipal system. In all other plants, liquid wastes are adequately treated and disposed of in accordance with local laws and regulations and World Bank guidelines. Stack emissions are adequately controlled in areas where air quality is a concern. Tree plantations are operated in a sustainable manner with protection given to large areas of natural habitat. The proposed second investment in Duratex will produce new facilities that will be in full compliance with World Bank guidelines, and produce substantial environmental improvements in existing facilities.

The is from the Public Information Center.

Host country location of environmental documentsEd. Sul Americano - Av. Paulista, 1938 - CEP 01310-200, São Paulo, Brazil

Date SPI sent to PIC February 28, 1996
For Additional Information contact: Corporate Relations Unit -
telephone: (202) 473-7711
facsimile: (202) 676-0365
Environmental documents for this project are available at http://www.ifc.org and from the World Bank InfoShop (http://www.worldbank.org/html/pic/aboutinfo.html).

Sponsor / Cost / Location