Bilt Paper B.V.

active

IFC is considering a corporate investment consisting of debt and equity in Ballarpur International Graphic Paper Holdings (BIGPH), a company incorporated in the Netherlands. BIGPH is a leading pulp and paper manufacturer in India and Malaysia through its subsidiaries. BIGPH is in turn a subsidiary of Ballarpur Industries Limited (“BILT” or the “Company” and BILT together with its subsidiaries referred to as the “Group”), which is head quartered in India and is an IFC investee company (# 10066 in 2000) and (# 20798 in 2003). IFC is also considering a loan to the Group, with use of proceeds partially directed at Sabah Forest Industries (SFI), whose operations are located in Sabah state of Malaysia.BILT has six manufacturing plants in India and one in Malaysia (Sabah). The consolidated capacity of BILT is 0.97 million tons per annum (mtpa) of paper and 0.76 mtpa of pulp. BILT has integrated pulp and paper mills at Ballarpur (300,000 mtpa pulp and 299,500 mtpa paper), Sewa (60,833 mtpa pulp and 72,000 mtpa of paper), Yamunanagar in Haryana (62,000 mtpa pulp and 85,000 mtpa paper), SFI (243,033 mtpa pulp and 144,210 mtpa paper), rayon grade pulp mill at Kamalapuram in Telengana (98,550 mtpa) and standalone paper plants at Bhigwan (315,000 mtpa) in Maharashtra and Ashti (54,000 mtpa) in Maharashtra all except SFI in India. The pulp for the standalone paper plants are sourced from Ballarpur and SFI. BILT’s Ballarpur plant has a ten year bamboo harvesting concession, from the Government of Maharashtra, which is due to expire in September 2014. This concession is in forest areas in Gadchiroli and Chandrapur districts of Maharashtra, India. Further, BILT has an extensive farm forestry program spread over 21,000 ha in the states of Orissa, Maharashtra, Chattisgarh, Telengana and Seemandhra.SFI was set up as a government owned and managed integrated pulp and paper (P&P) unit in 1982. In addition it had a saw mill and a ply mill established in 1996 and 1999 respectively. To ensure sustainability of raw material supply, a captive forest cum plantation concession was leased to the SFI plant. SFI was sold by the government to Lion Group in 1994. The forest concession along with two timber License Agreements were leased to the Lion Group in 1996. BILT acquired SFI in 2007 from the Lion Group including the forest cum plantation concession lease. SFI is an integrated pulp and paper manufacturing unit with a 243,033 mtpa pulp and 144,210 mtpa paper manufacturing capacity. The forest cum plantation concession is a lease on 287,000 ha of forest land, from which it sources the timber for pulp manufacture. The forest concession is comprised of: ~104,000 ha zoned as of Natural Forest Management (NFM); ~171,000 ha zoned as Industrial Tree Plantation (ITP) area, which can be converted to plantation for feeding raw material to the pulp mill and approximately 12,000 ha of land on which SFI has a title. SFI currently has a eucalyptus and acacia plantation spread over ~54,000 ha within ITP area and titled land. SFI, at present, plans to add ~30 000ha of plantation to the ITP area. It has rights to log within approximately 17 percent of the NFM area before 2020 using Responsible Low Impact (RLI) techniques. This right will be exercised subject to their ability to expand plantation area within the ITP area. Aside from pulp and paper, SFI also has an associated operation, integrated timber complex (ITC), where it manufactures 8,000 m3 of ply board and sawn timber every year. SFI also operates a berthing facility for ships to export the pulp to BILT’s India operations.The proposed investment is for refinancing of existing debt, routine capital expenditure at BIGPH’s plants and plantation expansion at SFI.