Packages 2008

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Packages Limited (the “Company” or “Packages”) is the leading integrated paper products manufacturer in Pakistan and has been an IFC client since 1964. Packages has two pulp and paper-making sites in Pakistan, the Lahore factory and Bulleh Shah Paper Mill (“BSPM”) located some 15 km from Kasur. Manufacturing operations started at BSPM in July 2007. In early August 2008, one paper machine, a 300 tonnes/day (“tpd”) machine (“PM6”) making test liner and fluting, supported by a 225 tpd OCC slushing line and 110 tpd wheat straw CTMP line were in operation. Packages plans to commission a nominal 330 tpd printing and writing paper line (“PM7”), and a 220 tpd de-inked pulp line at Kasur over the next several months.Paper-making at Lahore is being run down with the start of manufacturing at BSPM. However, when reviewed, a 120 tpd three-layer white board machine (“PM1”), and a 26 tpd tissue machine remained (“PM4”). A new 100 tpd tissue line (“PM9”) is due for start-up in August 2008. Lahore produces chemical pulp from wheat straw using an alkaline sulfite process, and has recycled fibre lines to support tissue-making. Lahore also has a large board printing facility, and manufactures printed and laminated flexible packaging materials. The project is an IFC subscription to an equity issue proposed by Packages. Proceeds will be used to retire debt and for the following physical projects: - installation of an incineration system to control solvent emissions from the board and flexible packaging printing lines; - recovery or incineration of solvents arising from flexible packaging lamination lines; - enhanced treatment of process effluents arising from the Lahore operations, and/or investment at BSPM designed to advance the transfer of papermaking from Lahore to BSPM. It is Packages’ aim expediently to transfer all paper-making from Lahore to BSPM in order to benefit from increased production efficiency and facilitate a proposed real-estate development of the Lahore site.