ERU Hungaria Kft

completed

Summary Of Project Information (SPI)Project NameHungary-ERU Hungaria Processed Cheese Project     RegionEuropeSectorProject No007578Projected Board DateJanuary 7, 1997Company NameERU Hungaria KftTechnical Partner and/or Major Shareholders The major shareholder is ERU Beheer B.V., a Dutch family-owned and medium-sized manufacturer of processed cheese with production facilities in The Netherlands, Portugal and, as of recently, Hungary.Project Cost Including proposed IFC investment US$7.4 million, with an IFC A Loan of US$2.5 million and an IFC B Loan of US$2.0 million.Location of project and Description of site The project is located in an industrial area of Budapest on a 12,200 sq.m. property with good road and direct railway connection. The site has existing buildings and facilities which in part have been renovated during the last 18 months and in part will be replaced by modern and more efficient facilities under the proposed project.Description of Company and Purpose of Project The project involves a post-privatization modernization and expansion of a cheese processing company. The Dutch Sponsors acquired the local facilities in 1995 on an asset buy-out basis when production had all but stopped. Production increased rapidly thereafter to reach presently some 1,800 MT p.a. The investment program will increase capacity to about 4,300 MT p.a. in line with sales targets. The project will increase the competitiveness of the Hungarian processed cheese sector by improving quality, introducing new products and packaging, contributing lower cost production technology, and developing new marketing concepts. About 40 percent of total production is projected to be exported to serve the Sponsors’ existing customer base outside the EU. Environmental Category and Issues This is a category B project according to IFC’s environmental review procedure. Environmental, health and safety issues analyzed include standard of existing facilities, site location, air emissions, effluent management, product hygiene, and occupational health and safety standard. The plant’s hygienic standard is up to international standard following the improvements after ERU’s take-over. All operating, quality and safety standards are based on Dutch experience, which again is based on ISO 9002 norms. The Company’s social facilities have been upgraded since the privatization. Based on its review, IFC concludes that the proposed project is being designed to meet Hungarian requirements and World Bank environmental, health and safety guidelines. The is available from the Public Information Center.Date SPI sent to PIC      December 4, 1996For Additional Information contact: Corporate Relations Unit -telephone: (202) 473-7711facsimile: (202) 676-0365Environmental documents for this project are available at http://www.ifc.org and from the World Bank InfoShop (http://www.worldbank.org/html/pic/aboutinfo.html).