Summary of Proposed Investment
Project Number
9486
Company Name
FAPLAC S.A.
Date SPI Disclosed
Aug 23, 1999
Country
Argentina
Industry
Agribusiness and Forestry
Status
Completed
Sector
Wood Panels and Engineered Wood Products
Department
Regional Industry MAS LAC & EUR
Environmental Category
B - Limited
Previous Events
Approved : Nov 8, 1999
Signed : Dec 9, 1999
Invested : Mar 17, 2000
Project Description
Summary Of Project Information (SPI)
| Project Name | Argentina - Faplac S.A. |
RegionLatin America and Caribbean
Sector
Project No009486
Projected Board DateSeptember 25, 1999
Company NameFaplac S.A.
Technical Partner and/or Major Shareholders
Faplac is 98.9% controlled by the Louis Dreyfus Group, a worldwide organization of diversified companies with headquarters in Paris and New York. The balance of Faplac’s shares is traded on the Buenos Aires stock exchange.
Project Cost Including proposed IFC investment
The total project cost is estimated at US$95.5 million. IFC is considering a US$10 million A Loan and a US$5 million convertible loan (C Loan), both for its own account.
Location of project and Description of site
The proposed project consists of the construction of a particle board and finished panels plant in Zárate, an industrial zone located in the province of Buenos Aires. The Zárate plant will replace Faplac’s existing particle board plant in Tigre, province of Buenos Aires.
Description of Company and Purpose of Project
Faplac S.A. pioneered the production of particle board in South America in the 1960s and is currently one of Argentina’s largest producers of particle board. The company''s product line includes raw panels, plastic laminate, decorative paper coated panels and wood veneered panels. The company’s 1998 total sales reached US$48.3 million, or 115,000 m³ of particle board, of which about 87% was sold in the domestic market and the remaining 13% was exported. Over the last few years, Faplac has averaged about 35% market share.
The new plant will employ state of the art technology, providing significant cost-savings in the two most important raw materials: wood and resins. In addition, the project will allow Faplac to increase production capacity, improve quality, introduce new value-added products, and enhance market presence domestically and internationally.
By financing the construction of an modern particle board plant outside of the Greater Buenos Aires area, the project will attract investment to less industrialized parts of the country, and assist Argentina in maximizing its comparative advantage in the forestry products sector by contributing to its growth and development.
Environmental Category and Issues
This is a category B project according to IFCs environmental review procedure. Key issues considered during appraisal include: plantation management and sustainable harvesting; environmental issues associated with closure of the existing plant at Tigre; acquisition of the Zárate site; compliance with World Bank Group environmental requirements; fire protection and emergency response; occupational health, safety and social issues relating to change of processing location and any retrenchment.
The Company currently operates three plantations and no wood is obtained from natural forest. The plantations are long established and well managed with appropriate fire-breaks and control systems as well as Integrated Pest Management. The company is considering acquisition of other areas set aside for plantations. These would be managed in the same way as existing Faplac plantations and would not result in significant adverse impacts to natural habitats.
The Tigre site will close in September 1999. While a 1997 survey indicated elevated levels of phenols and hydrocarbons in soils and groundwaters in and around the site, this is not attributable to Faplac. Local planning and environmental authorities are aware of this issue and are content that Faplac has no liabilities with regard to the contaminated land.
The new production site at Zárate is within a designated industrial development area west of the city. The site was formerly farmland, no resettlement has been required and no economic displacement has occurred.
The Zárate site is being designed to comply with World Bank Group requirements and the wood products from the plant will be E1 certified. Closure of the Tigre plant will result in significant improvements in local air quality.
At Zárate, a comprehensive fire control system has been installed throughout the plant and fire control systems are adequate at other sites. The company provides appropriate training and provision of personal protective equipment to staff and there are adequate occupational health and safety controls.
A compensation program has been developed to address retrenchment, and severance payments will be paid in accordance with Argentinean requirements.
The is from the InfoShop.
| Host country location of environmental documents | At the gate of the new plant whose address is: Camino de la Costa Brava S/N (2800) - Zárate Provincia de Buenos Aires República Argentina |
Date SPI sent to InfoShop August 23, 1999
“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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