Yulon 2

complete

The project will finance the company's upgrading of its nylon textile operations and expansion in its PA BCF carpet yarn operations in Slovenia. The project is in addition to a secured senior loan of DM 32 million financed by the EBRD on 16 November 1995 which was targeted at the modernisation of the company's BCF polymerisation process and upgrading of the PA BCF carpet yarn operations. The project will help finance equipment to: (i) increase Yulon's competitiveness by upgrading the PA6 polymerisation section and upgrading the PA66 nylon section to produce texturised filaments; and (ii) expand the production capacity of the PA BCF carpet yarn sector. The proposed financing will help to complete the company's operational restructuring, initiated through the first investment made by the EBRD in 1995. The project supports export-oriented activities, directed at the markets of western Europe and the Visegrad countries (Hungary, Poland, the Czech Republic and the Slovak Republic). Important technical skills will be transferred through the operation of state-of-the-art machinery. The project will also have a positive transition impact through the fostering of forward linkages, as it utilises downstream marketing. Yulon d.d. is a joint-stock company established under the laws of Slovenia. It is majority owned by Aquafil S.p.a, the largest company of the Bonazzi Group, an Italian privately owned textile group. Yulon produces PA6 and PA66 filaments for the nylon textile (hosiery) industry and PA BCF for the nylon carpet yarn industry. (i) DM 10 million (ECU 5.28 million) equity investment; (ii) arrangement of a DM 10 million (ECU 5.28 million) secured seven-year senior loan to participating commercial banks. DM 20.6 million (ECU 10.9 million). The project was screened B/0, requiring an environmental analysis to examine the impact of the proposed investment. As part of the previous Yulon project, an environmental audit of the facility was carried out by independent consultants in July 1995. According to the annual environmental report submitted to the Bank on 21 February 1996, and a review of the facilities by the Bank's environmental specialist, carried out in September 1996, there are no outstanding compliance issues associated with Yulon's other production activities. The current project is focused exclusively on the provision of new machinery and equipment. There do not appear to be any significant environmental issues associated with the project. On the basis of the environmental analysis the following positive environmental features will form part of the project: Legal compliance: The current project is focused exclusively on the provision of new machinery, all of which will be in compliance with EU standards for environment and safety. The company has already received approval and permits for the installation of a new gas-fired boiler for the high-temperature oil heating plant. Environmental standards: The company is in full compliance with Slovenian and EU legal requirements for air emissions, waste disposal and waste-water discharge and with all the Bank's environmental covenants. Environmental management: The company is currently implementing the international environmental management system, ISO14001. Project implementation: Project implementation will result in a reduction of water consumption and improved energy efficiency and a reduction of health and safety risks. None.