El Shorouk (Motaheda)

completed

The proposed project involves a construction of a 135,000 tons per annum (“tpa”) greenfield duplex board plant (the “Project”) and seeks to utilize the imported and domestic waste paper as one of the main raw materials to produce duplex board, thereby harnessing the increasing demand for packaging materials as a result of the growing consumer goods industries in the MENA region. The proposed Project is based on acquisition, refurbishment and relocation of a good-quality second-hand machine from The Netherlands to the Project site in the Sadat city industrial zone, 60 km away from Cairo. The Project cost is estimated at approximately US$84.5 million. The Project will lead to increased recycling of paper in Egypt and is in line with the new IFC Forest Strategy, which supports investments in resource efficient manufacturing. It will create approximately 200 direct manufacturing jobs and additional employment throughout the waste paper collection supply chain. Project concept rests on the existing deficit of duplex board in the MENA region, whereas regional converters are unable to satisfy their demand for duplex board from local sources, and factors for cost-competitive duplex board manufacturing in Egypt, including availability of competitively priced gas and power, labor advantage and potential for access to extensive waste paper base, which has not yet been tapped due to lack of comprehensive waste paper collection infrastructure in Egypt. With no newly-announced capacity in the region, the Project is expected to replace imports and compete with the regional duplex board producers on quality as well as cost basis. The Project will be implemented by El Shorouk, an operating subsidiary of the National Printing Company ( “NPC”), the largest converter and printing house of consumer packages in the region with consolidated 2008 revenues of US$73.8 million, EBITDA of US$13.3 million and Net Income of US$4.1 million. For the purposes of the Project, El Shorouk will set up a new subsidiary, El Motaheda, which will be majority owned by El Shorouk.