Egger

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The proposed project supports the construction, equipment and placing into operation of a greenfield particleboard production plant in Suceava county, northern Romania. The annual production will be of approximately 550,000 cubic metres of melamine-faced particleboard and 50,000 cubic metres of raw particleboard. Sales will be targeted mainly towards neighbouring countries and for the Romanian market. The potential transition impact associated with this project derives from the increased competition in the sector, upstream and downstream benefits, demonstration effects and important environmental benefits. The project will have a significant economic impact on the region of Suceava, north-east of Romania, creating up to 700 direct jobs and a multiple of indirect ones in the sector, and value-added utilisation of its main natural resources, forestry. The project will enhance competition in the local particleboard market, which is currently dominated by a single producer. Upstream, the project will bring market growth for sawdust and wood chips, while assisting, downstream, the increase in the domestic construction and furniture industries. The introduction of a reputable foreign investor and modern technology will enhance technical and managerial skills in the sector. The plant will be using efficiently large quantities of sawdust and wood chips which currently put a lot of pressure on local authorities from an environmental point of view. The ultimate Client for the proposed Project is Egger Romania SRL, a Romanian limited liability company, which is majority-owned by Austrian-registered Egger Osteuropa Beteiligungs GmbH, part of Egger Group, a leading family-owned wood panel producer. Direct equity investment of up to EUR 17 million, plus A/B Loan of EUR 110 million, of which up to EUR 66 million is expected to be syndicated to commercial banks. EUR 210 million. Screening categories and rationale for classification The construction and operation of a new particleboard production facility is associated with limited direct environmental, health and safety impacts, which can be readily identified and assessed as well as efficiently mitigated with modern technology and project design. The new plant would be constructed on current agricultural land located adjacent to the national road DN17A. The distance between the site border and the closest permanent residential buildings is approximately 300 m. There are no known environmentally or archaeologically valuable or sensitive areas in the vicinity of the site. For the above mentioned reasons, the EBRD has classified the project B/0, requiring an Environmental Analysis. Information reviewed during the environmental appraisal The Environmental Analysis has been prepared in accordance with the EBRD's requirements by independent environmental experts. The investigations have been based on a site visit and review of the location, data provided by Egger and a previous Environmental Impact Assessment report developed in 2005 for a similar production facility in UK, as well as on site-specific local data collected and interviews with local authorities held in October 2005. The study also compared the planned production facility with the Best Available Techniques (BAT) used in European Union. Key environmental issues and mitigation The investigations showed that the Project will be structured to meet Romanian environmental, health and safety (EHS) requirements and EU environmental standards, including BAT and that the direct environmental, health and safety impacts during the construction and the operation of the new particleboard plant would be insignificant and efficiently mitigated. The new plant will introduce state-of-the-art technology and environmental protection measures will be fully incorporated in the project design. All construction activities on site will be controlled through operational procedures for pollution prevention, waste management, emergency response and incident reporting. A traffic management plan will be developed in relation for construction traffic. During the operation, applicable standards limits for air emissions, water, soil and noise will be respected. The combustion air from gas and wood dust fuelled boilers will be purified from particulate matter by bag filters. Exhaust gases from the particleboard process will be cleaned in a Wet Electrostatic Precipitator (WESP) ensuring that dust and formaldehyde emissions to the atmosphere will be below BAT standards for particleboard manufacturing. All industrial and cooling water will be circulated in closed loops and no industrial wastewater will be discharged. Fresh water is needed only to make up for the evaporation losses. Minor amount of household wastewater purified on site. Storm water from the site surface will be collected into a separate network and discharged into a sedimentation basin to be recycled for platform cleaning. Clean storm water collected from the roof will be also collected in a separate system and re-circulated into the process. The amount of waste will be limited, because bark and other wood wastes will be used as a fuel for the plants heating and steam generation. Small amounts of waste oils and other hazardous waste will be collected by a licensed waste management company. The main worker health and safety impacts of indoor noise, workplace dust and potential formaldehyde fumes will be mitigated by appropriate encapsulation measures, by the efficient operation of the exhaust and ventilation systems, and/or use of personal protection equipment. It is envisaged that all work processes will be enclosed and provided with adequate extraction and ventilation. All buildings and work areas will be equipped with portable fire extinguishers, a centralised fire water hydrant network with local sprinklers and automated fume detector and warning system. The particleboard products will be of classification E0 or E1, which can be safely used without causing elevated concentrations of formaldehyde in indoor air. Wood procurement The plant will use up to 700,000 m3/year of round wood. A substantial part of that will consist of low grade round wood, which have little or no commercial value and which is currently mainly disposed of. In addition, saw dust and sawmill residues will be used to reduce the amount of round wood needed. To mitigate the adverse impact of the wood procurement and to ensure the wood is of legal origin, the Company will implement wood procurement procedures that are based on principles of sustainable forest management, ensuring that: Egger has had group Forest Stewardship Council (FSC) chain-of-custody certification for its wood supply covering all its mills since 2002 and will introduce the system at the Romanian plant, subject to availability of certified wood and market conditions. Disclosure of information and consultation In accordance with Romanian law, the project is likely to be a subject to formal public disclosure and public consultation under an Environmental Impact Assessment procedure for obtaining the construction permit. In the context of EBRD’s potential participation in the project, the Company has released locally this summary describing the relevant environmental issues associated with the project and the mitigation measures. Monitoring Egger will systematically monitor and report its environmental and health and safety impacts to ensure it complies with Romanian and EU environmental standards. The EBRD will monitor the project's compliance with the applicable environmental and social requirements during the lifetime of the project by reviewing Egger’s annual environmental reports (AERs) on the project. None. Karin Wagner PR - Communications Fritz Egger GmbH & Co - Holzwerkstoffe Tiroler Straße 16, A-3105 Unterradlberg, Austria Tel: +43 (0) 50600-10681 Fax: +43 (0) 50600-90681