Announcement of IFC investment in La Papelera Argentina, S.A., Argentina on September 1, 1964

.Ili'C Press Release No. 64/16 SUBJIDT: IFC Investment in La Papelera Fo-r Release AM Newspapers Argentina, S.A., Argentina September l, 1964 The International Finance Corporation (IFC), an affiliate of the World ff Bank, has agreed to assist La Papelera Argentina, S.A~, one of the largest I I paper producers in Argentina, in financing the completion of a $24 million program for mrxiernizing and improving the company·• s paper plant, and expanding its annual capacity from 55,ooo to 75,000 tons. IFC will lend $2.5 million and will receive the right to subscribe to • 2 .8 million common "Class B" shares of the company. Other financing :for the last phase of the project has been provided by the shareholders, who have sub- scribed $4.3 million., and by retained earllings amounting to ~l million. About $16 million had previously been provided for the expansion program by the share- holders, from retained earnings, and from borrowings. La Papelera Argentina was established in 1888 and is om of the largest manufacturing enterprises in Argentina. It manufactures a substantial portion of the country's requirements of kraft paper, tissue and fruit-wrapping paper, ~ardboard and corrugated boxes; its main plant is located at Bernal, near Buenos Aires. The company's shares are held by appro.xirna tely 10,000 individual .1.1d institutional holders, and the shares are among the most widely traded Jtocks on the Buenos Aires Stock Exchange. The largest single sha:reholder of ·cha company is Cia. General Fabril Financiera S.A., an industrial financial • ~1.Lt'3rprise.  .. 2 - Papelera's modernization and expansion program includes a new 12,000- kilowatt power station; installation of a semi-chemical wood pulp unit to • produce 151 000 tons of wood pulp per yea~; installation of a kraft paper machine to replace existing obsolete machines, and to increase kraft paper capacity; and modernization o.f other existing manufacturing facilities. When the program is completed; the o ompany' s production will help to natisfy the increasing demand in Argentina for kraft paper, multiwall bags and nther packaging materials, and will make possible substantial savings in production costs. By utilizing domestic forest resources, the new wood pulp unit will decrease the need of pulp to be imported and will make possible a saving up to $2 million per year in foreign exchange. 1'1oreover, as the kraft • paper will be of substantially higher quality, additional uses for this kind of paper, not considered before, will be possible. The new manufacturing facilities are expected to be in operation in early 1965. This is IFC 's fourth investment in Argentina, and will raise the Corpora ... tionts total commitments in Argentine enterprises to $10.7 million. •