PROJECT

Projects

Summary of Proposed Investment

Project Number

8966

Company Name

BURAPHA AGRO-FORESTRY COMPANY LTD

Date SPI Disclosed

Mar 26, 1998

Country

Lao People's Democratic Republic

Industry

Agribusiness and Forestry

Status

Completed

Sector

Solid Wood Products (VAP)

Department

Regional Industry - MAS Asia & Pac

Environmental Category

B - Limited

Previous Events

Approved : May 7, 1998
Signed : Jun 4, 1999
Invested : Aug 18, 1999

Project Description

Summary Of Project Information (SPI)

Project NameLAO PDR - SEF BURAPHA WOOD PROCESSING (BAFCO)
     
RegionAsia
Sector
Project No008966
Projected Board DateApril 26, 1998
Company NameBurapha Agro-forestry Company Ltd.
Technical Partner and/or Major Shareholders

BAFCO’s ownership is to be 75% Silvi Nova BV of Sweden, 20% Mr. Sumphorn Manodham, and 5% Mr. Thongthanh Southitham (formerly Silvi Nova held 90% and Mr. Manodham owned 10%). Silvi Nova is a Swedish consulting and management company, equally owned by Messrs. Ake Jacobson, Hugo Berch, and Peter Fogde. Mr. Sumphorn Manodham and Mr. Southitham are Lao citizens with extensive experience in Lao PDR and elsewhere in the agro-forestry industry.

Project Cost Including Proposed IFC Investment

US$ 2.9 million including an IFC Loan of up to US$ 1.1 million

Location of Project and Description of Site

The Project site will be located at Nabong, less than one-hour’s drive from Vientiane and close to most of BAFCO’s plantations. The site is a flat piece of land on which BAFCO has a sublease up to the year 2012 with an option to renew. The land is central to the plantation and is serviced with electricity and well water. IFC’s engineering and environmental staff have visited the site and find it suitable.    

Description of Company and Purpose of Project

BAFCO will produce glue laminated board (gluelam) for use as furniture components for export to Europe and Asia. Air dried and kiln dried sawn lumber will also be sold to the local construction sector. BAFCO already has some 700 hectares of eucalyptus plantations which were planted in the 1990s. These plantations will provide about 40% of the Project’s log supply requirements in the Project’s initial years, increasing to 67% within six years. IFC and the IFC- managed Mekong Project Development Facility have played an important role in the Project by reviewing the technical, strategic, financial, environmental, and legal arrangements. Under the Extending IFC’s Reach Initiative, IFC is one of the few sources of long-term capital for Lao projects. The Project supports the Lao Government’s policy to promote private sector projects and, more specifically, projects which foster the preservation of Lao’s natural forests and the efficient use of Lao’s resources to produce value-added products. By increasing the stump value of the plantation wood, BAFCO will encourage further development of private, farm-based plantation forestry, thereby contributing to the conservation of native forests and preservation of the environment. In addition, BAFCO will allow farmers to generate income using land that in many parts of Lao is degraded and no longer suitable for food crops. As the first eucalyptus gluelam unit in Lao, the Project will also introduce a new product and technology into the country while generating foreign exchange earnings and increased tax revenues.

Environmental Category and Issues

This a category B project according to according to IFC''s environmental review procedure because specific impacts may result which can be avoided or mitigated by adhering to generally recognized performance standards, guidelines, or design criteria. The following potential environmental, safety and health impacts of the project were analyzed: wood supply source and management; air emissions; solid waste management; hazardous materials storage and handling; fire prevention and emergency response; and employee health and safety, and training.

Wood will be sourced from BAFCO''s existing eucalyptus plantations or will be purchased from other small eucalyptus plantations nearby. No timber from natural forest areas will be purchased without the specific prior written approval of the IFC. Air emissions including particulates from the wood-fired boiler and dust from sawing and planing activities will be controlled through appropriate technology to meet World Bank Group guidelines. The solid wood wastes generated by the plant will fuel the boiler for the drying kiln. Standard and reasonable fire detection and protection and worker health and safety measures will be implemented, including worker training in relevant aspects. The project will be comply will the relevant World Bank Group policies and guidelines. IFC will monitor ongoing compliance during the lifetime of the Project by evaluating reports submitted annually to IFC by BAFCO and by conducting periodic supervision.


The is from the Public Information Center.
Date SPI sent to InfoShop March 26, 1998

“This Summary of Project Information is prepared and distributed to the public in advance of consideration of the proposed transaction by the Corporation’s Board of Directors. It is provided for the purpose of enhancing the transparency of IFC’s activities and should not be construed as presuming the outcome of IFC Board consideration.”

For Additional Information contact: Corporate Relations Unit -
telephone: (202) 473-7711
facsimile: (202) 974-4384
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