Copamex

completed

Copamex S.A de C.V. (Copamex or the Company) is a leading Mexican producer of paper products for the consumer goods, industrial packaging and printing and writing (P&W) markets. Located in Monterrey, Mexico, Copamex is a holding company with 39 subsidiaries (35 in Mexico, 2 in the United States, 1 in Costa Rica and 1 in Nicaragua) of which 36 are wholly-owned and 3 are majority-owned joint ventures. Historically, Copamex was a packaging and printing and writing company. Copamex entered the paper-based consumer goods market gradually with the acquisition of a local tissue producer in 1993 and over the next four years continued expanding its capacity organically. Since 1996, its business has grown rapidly through the combination of an aggressive capital investment program and targeted strategic acquisitions, and has transformed itself from being primarily a producer of industrial paper products to one of the premier producers of paper-based consumer products and value-added industrial paper products in terms of sales in Mexico. Such capital investments and strategic acquisitions include: acquisition of a 51% interest in a feminine hygiene business; acquisition of a tissue manufacturing facility; the installation of a notebooks production plant; starting operation of a tissue converting machine and a multi-wall bag machine in Costa Rica; acquisition of interest in the only tissue paper producer in Nicaragua; launching a production line for the manufacture of adult incontinence products; commenced operation of a new tissue paper machine; and commenced operation of a machine for the manufacture of multi-wall bags. In addition, the company has a closed pulp mill, two small experimental plantations, and a small factory manufacturing pine oil and essences. Much of Copamex’s fiber needs are derived from waste paper and cardboard, and to this end Copamex has developed a network comprising six collection centers in Mexico, three in Texas and one in New Mexico. The foregoing acquisitions have been primarily funded by acquired indebtedness, and therefore Copamex has approached IFC for assistance with a financial and plant modernization program. The principal components of the project are as follows: refinancing and other measures designed to improve the company’s financial profile in order to access national and international sources of finance on competitive terms; rationalization of existing facilities; and measures aimed at improving corporate governance issues, environmental management and enhance the social impact of the company.