AB Ekranas

completed

Summary Of Project Information (SPI)Project NameLithuania - Ekranas     RegionEuropeSectorProject No008169Projected Board DateDecember 13, 1998Company NameAB EkranasTechnical Partner and/or Major Shareholders Ekranas is a publicly traded company. Foreign investors currently own 48% of the Company’s shares while management and employees 50%. The remainder is held by other investors. The largest foreign shareholder in Ekranas, with 32% of its shares, is a joint venture between Profilo, a major Turkish color television manufacturer, Farimex, a Swiss trading company, and individual investors.Project Cost Including proposed IFC investment The total project cost is estimated to be US$39.5 million. IFC''s investment in the proposed project consists of an IFC senior loan of up to US$12.8 million and an IFC convertible loan of up to US$2.2 million.Location of project and Description of site The project will be undertaken at the existing TV tube factory located in Panevezys, Lithuania, approximately 130 km north of the capital, Vilnius. Description of Company and Purpose of Project Ekranas is the second largest private company in Lithuania. The Company makes color TV tubes and is the only remaining TV tube factory of all of Former Soviet Union which remains in operation. The purpose of the project is to modernize existing production facilities in order to improve product quality and increase efficiency of the process. Modernization will also enable the Company to begin external sales of glass components in addition to color picture tubes. IFC has taken a very active role in developing the project concept and the investment strategy for Ekranas. IFC''s involvement will also help the Company to obtain better access to financing from domestic banks. IFC''s financing of Ekranas'' modernization will have a strong positive development impact. Ekranas currently employs approximately 4,500 people, about one-third of all industrial workers in the city of Panevezys. Without investments proposed under the project, Ekranas will be unable to survive in the long term and rising unemployment would have significant consequences for the local economy. Highly skilled relatively low cost labor force are among the most important comparative advantages of Lithuania and the project builds on this base -- because of high capital intensity and rapidly changing technologies, the development of electronics industry in Lithuania is unlikely without injection of outside capital and transfer of know-how.Environmental Category and Issues This is a category B project according to IFC''s environmental review procedure. Environmental, occupational health and safety issues associated with this project include: potential soil and groundwater contamination at the existing facility, air emissions, solid waste management, and employee health and safety. IFC’s Environment Division visited Ekranas and a full environmental audit of the site has been undertaken by specialist environmental consultants. The Company has approved a formal action plan to address all the recommended improvements. This investment program will bring the company into compliance with WB guidelines through the installation of new pollution control equipment and the establishment of preventative measures (such as improved chemical storage). It will also encourage resource efficiency (energy and water conservation initiatives.The is from the Public Information Center.     Date SPI sent to PIC      November 13, 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) 473-7711facsimile: (202) 974-4384Environmental 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).