Borsteklo IV

completed

Glaverbel is strongly committed to making Borsteklo a successful turnaround story and to consolidate its operations within its network of float glass and automotive glass production subsidiaries. This is already evidenced by Glaverbel''s significant progress in undertaking environmental clean up efforts, strengthening management, reduction in barter, the introduction of computerized reporting systems, IAS accounting, and improvements in the Company''s distribution network.The benefits of the modernization plan to the company include extended furnace life, improved glass yield, a 14% expansion in capacity, and lower energy costs derived from improved technology. Following the cold repair of furnace #1, Borsteklo’s capacity will reach 1,200 tons per day. The company will also be capable of supplying new products, including large glass panels used in the construction of modern commercial buildings and improved and higher quality automotive products for Russian JV’s with Western Manufacturers, and other possible new entrants.IFC’s role in the project is twofold. First, by providing long-term finance, IFC will assist a project with long-term foreign currency needs which are currently unavailable in Russia today. Given the sponsor’s desire to share Russia risk and the reluctance on the part of commercial banks to provide long-term debt to Russian projects, the lack of IFC’s involvement would constrain the company’s ability to finance its activities. Second, IFC’s involvement will allow the Corporation to continue to leverage its strong client relationship to undertake a project in a difficult and uncertain environment. The project will enhance the positive demonstration effect for local businesses Borsteklo has had through their best practice production and environmental standards. The company will also continue to provide sustainable employment to the people of Bor located outside of Nizhny Novgorod where few other viable employment opportunities exist. Indirectly, Borsteklo will also continue to help create jobs and improve infrastructure in many key upstream and downstream businesses. Upstream, Borsteklo''s steady, 256,000 tpa demand for sand, soda ash, dolomite and other glass inputs allows suppliers the ability to grow and encourages competition. Downstream, Borsteklo''s high quality product helps dealers build their client base of consumers.