Kronospan Bulgaria II

completed

The project is to set up an Oriented Strand Board (OSB) line on existing premises at Bourgas, which would substitute a previously planned particleboard line and would further upgrade the existing facilities. The project will double current production capacity, and further increase melamine-facing capacity. The added new capacity will achieve economies of scale, which are critical for the industry. The project is expected to boost margins, enhance the company''s competitive position in Southeastern Europe and provide strategic diversification. In addition, the project will contribute to the modernization of the Bulgarian wood panel industry, which is currently characterized by inefficient, low-quality operations and will have a potential strong impact on the development of the industry in the country.IFC’s role in the proposed project is three-fold: (i) increase confidence in and support for the Government’s privatization efforts; (ii) act as a catalyst for foreign investment and private sector participation in Bulgaria; and (iii) help the Sponsors gain access to long-term financing.