Kronostar

completed

Kronostar (the company or the project) is 100% owned by Krono Holding AG since early 2002. The AOO Sharjadrew combine dates back to early 1900’s with a construction of a saw mill. Over the years, it has established a particleboard factory, and was privatized in 1992. AOO Sharjadrew filed for insolvency in 1997. In 2002, Krono Holding AG purchased AOO Sharjadrew’s assets.The purpose of the investment is to upgrade of the existing wood panels plant, and to install a new particleboard and Medium Density Fiberboard (MDF) lines. The project has strong business fundamentals. It will contribute to the modernization of Russian wood panel industry, which is currently characterized by old and inefficient operations, and it will have a potentially strong impact on the revival and development of the: - rural area of the Kostroma Oblast;- wood panel industry, and - furniture industry in the Russian Federation.The project is supported by the strong expected demand growth for wood panels. Using modern technology, Kronostar will produce particleboard and wood panels, and it will create employment for over 600 direct jobs at the peak of the company’s operations. IFC’s role in the project is manifold. IFC will act as a catalyst for foreign investment and private sector participation in Kostroma, and to help the sponsor gain access to long-term financing. The role of IFC’s involvement is also to ensure that the projects benefits trickle down in a sustainable manner to the community.