Summary of Proposed Investment
Project Number
8987
Company Name
STORA ENSO PAKADZHING BB, OOO
Date SPI Disclosed
Apr 29, 1998
Country
Russian Federation
Industry
Agribusiness and Forestry
Status
Completed
Sector
Paper Packaging Products (Including Boxes, Cartons, etc.)
Department
Gbl Ind, Manufact, Agribus & Services
Environmental Category
B - Limited
Previous Events
Approved : Jun 17, 1998
Signed : Jul 6, 1999
Invested : Nov 20, 2000
Project Description
Summary Of Project Information (SPI)
| Project Name | Russia-Pakenso |
| Region | Europe |
| Sector |
Projected Board DateMay 30, 1998
Company NameZAO Pakenso
Technical Partner and/or Major Shareholders
The primary sponsor of the project will be the packaging company Pakenso Oy, a wholly owned subsidiary of the ENSO Oyj, a leading paper company in Europe. Pakenso is a market leader in corrugated board production in Northern Europe. In 1997 Pakenso’s sales reached US$280.6 million equivalent and its profit was US$25.1 million equivalent. Pakenso’s business strategy is to become the market leader in corrugated board production within the territory of its operation -- which includes Finland, Sweden, Baltics, Eastern Europe and Russia -- where it currently holds second place after Assi Doman. As a part of its expansion strategy, in 1994 Pakenso set up a sheet plant in Estonia and in 1996 a corrugated board plant in Latvia.
Project Cost Including proposed IFC investment
The total project cost is US$40 million. The IFC investment under consideration is:(i) an “A” loan of US$6 million; and (ii) an equity investment of approximately US$1.5 million for 12% of a Russian company, ZAO Pakenso.
Location of project and Description of site
In 1997 Pakenso purchased 9 ha site in town Balabanobo, 100 km south-west of Moscow, to build a new corrugeted board plant. Pakenso will renovate an old building located on the site and build a new warehous for raw materials and finished goods. The total area occupied by the plant and a warehose will be 14,000 sq. m. The machinery for the plant will be all new and modern, except for two converting machines which will be up-graded and moved from Pakenso’s Finnish and Swedish plants.
Description of Company and Purpose of Project
Pakenso has formed a Russian subsidiary, ZAO Pakenso, to build and operate a corrugated box production facility. This facility will be able to produce 90 million sq. m. of corrugated board per annum and convert it into customized boxes. Paper for the production of corrugated boxes will be purchased from the sponsor as well as from several other european paper producers.
A significant portion of output will be purchased by the fast growing consumer sector in the Moscow region. ZAO Pakenso will be able to leverage and further expand the currently established client network by providing its clients with: (i) high quality corrugated boxes at a lower price; (ii) reliable supply; and (iii) superior service.
IFC will play a catalytic role in the project by encouraging the Sponsor’s current and potential future investments in Russia. IFC’s technical assistance program will be beneficial in identifying potential Russian suppliers of raw materials for the Pakenso project. IFC will provide long-term financing for the project which would not otherwise be available on reasonable terms.
Environmental Category and Issues
This is a category “B” project according to the IFC environmental review procedure. Environmental, occupational health and safety issues associated with this project include: current land use at the new plant; adhesive characteristics eg. solvent based, water based etc; ink characteristics; liquid effluents; workplace health and safety (guarding, ventilation); fire and safety; and sustainable sources of raw material.
Pakenso will conduct an examination of the site to ensure that there is no past contamination. The adhesive used in the process is starch and contains no solvents. The inks are water based and do not contain any heavy metals. Pocess washing water and sanitay effuent is conveyed to the municipal treatment plant. Health and safety issues relate largely to noise. Pakenso will use silencers. The factory wll be equiped with water reservior, sprinkler system, smoke detectors, and hand extinguishers. The Sponsor has demonstrated that the project will comply with the World Bank policies and environmental guidelines.
The is from the Public Information Center.
| Date SPI sent to PIC | April 29, 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
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