Note: Currency is given in U.S. dollars throughout unless otherwise specified.
Beijing, December 7, 2004—
The International Finance Corporation, the private sector arm of the World Bank Group, announced today a financing package to Jiangxi Chenming Paper Company. IFC’s largest financing in Jiangxi province will promote high standards in several areas, including environmental practices and community development. IFC is providing $72.9 million in equity and loans for its own account and is arranging an $205 million limited recourse project financing.
Global paper companies Sappi and Shimoorim which will take 34 percent and 7.5 percent of the company, respectively, to make their first direct investments in China along with China’s largest local paper company, Chenming Group. IFC is supporting the construction light weight coated paper machine with a 350,000 ton annual capacity, a bleached thermo mechanical pulp (BTMP) mill, and deinking plant. The financing will also support an ancillary power plant and transportation infrastructure in Nanchang, the capital of Jiangxi Province in southeast China. The total project cost is an estimated at almost $487
million. The mill is scheduled to start paper production in the first half of 2005.
“This is IFC's largest project in Jiangxi Province. With investment from companies based in South Africa and South Korea, this project is a model of South-South cooperation,” said Karin Finkelston, IFC associate director for the East Asia and the Pacific Department. “Chenming has sound financing, advanced and environmentally sensitive technology implementation, develops the community, impacts poverty reduction, and makes smart use of resources.” Dimitris Tsitsiragos, IFC’s Director for Global Manufacturing and Services Department, said, “This project brings best practices to China in a number of areas and demonstrates IFC’s commitment to companies that engage sustainable practices.”
Chairman Chen Hongguo of Chenming Group said, “This project is expected to be one of the largest joint ventures in Jiangxi. It brings advanced paper manufacturing technology to Jiangxi province, which has abundant plantation resources. IFC sets a good example for investors, public sector and financial institutions in China through its investment concepts and operational procedures encouraged in this project. With the assistance of IFC, Chenming Group is entering into a new phase for a locally listed company to set international standards.”
Shandong Chenming Paper Company is a leading Chinese paper producer and an annual paper production capacity of approximately 1.4 million tons in China. Sappi is a leading international paper manufacturer listed on New York Stock Exchange with an annual paper production capacity of approximately 5.5 million tons. Shinmoorim is a leading Korean fine paper manufacturer with an annual paper production capacity of approximately 500,000 tons.
Since 1985, IFC has financed $1.8 billion in 81 projects in China. The mission of IFC (
) is to promote sustainable private sector investment in developing countries, helping to reduce poverty and improve people's lives. IFC finances private sector investments in the developing world, mobilizes capital in the international financial markets, helps clients improve social and environmental sustainability, and provides technical assistance and advice to governments and businesses. From its founding in 1956 through FY04, IFC has committed more than $44 billion of its own funds and arranged $23 billion in syndications for 3,143 companies in 140 developing countries. IFC’s worldwide committed portfolio as of FY04 was $17.9 billion for its own account and $5.5 billion held for participants in loan syndications.