IFC Invests $200 Million in Latin America’s Largest Polypropylene Producer

Washington, D.C., December 14, 2005— The International Finance Corporation, the private sector arm of the World Bank Group, will provide $200 million to Suzano Petroquimica S.A., the largest polypropylene producer in Latin America and Brazil’s second-largest producer of thermoplastic resins.

IFC’s long-term financing will support a number of Suzano’s corporate initiatives, including the now completed acquisition of a 50% shareholding in Polibrasil and the debottlenecking of Polibrasil’s plants in Mauá and Duque de Caxias. The investment will also support Suzano’s corporate restructuring and will provide for debt refinancing, allowing Suzano to solidify its position as one of the leading companies in Brazil’s petrochemical sector.

The investment consists of an A-loan of $50 million and a C-loan of $10 million for IFC’s own account, as well as a B-loan of $140 million for the account of participant banks. Syndication of the B Loan was oversubscribed, but the deal amount was kept at the original level of $140 million. ABN AMRO, Banco Santander Central Hispano, FMO and Societe Generale have joined the B loan as arrangers will final commitments of $ 26.25 million each, while BBVA and Natexis have joined as participants with $ 17.5 million each"

Atul Mehta, IFC’s Director for Latin America and the Caribbean, said, “We are delighted to support the Suzano Group with this financing package. It is no coincidence that the group’s forestry and paper business was selected as one of the first companies listed in the recently launched Sustainability Index (ISE) in Brazil’s Bovespa. IFC was a key sponsor of the ISE while Suzano was one the few companies that met its stringent criteria. It is clear that we both share a common vision and a commitment to sustainable business practices.”

Rashad Kaldany, IFC’s Director for Oil, Gas, Mining, and Chemicals, noted, “IFC has played a significant role in the development of Brazil’s petrochemical industry, dating back to our financing of the country’s first petrochemical project in the early 1970s. The sector is now in a second phase of consolidation to enhance its global competitiveness. IFC remains committed to supporting the industry by helping key players such as Suzano strengthen their balance sheets and improve their sustainability policies and practices.”

João Pinheiro Nogueira Batista, Vice President of Suzano Holding and CFO of Suzano Petroquímica, said “This financing operation underlines our strategy to be a leader in this sector in a sustainable basis. Our commitment to the capital markets has greatly improved how investors perceive our risk,, which makes possible the financing of Suzano Petroquímica’s growth and reduces our capital cost.”

IFC in Brazil
During fiscal year 2005, Brazil received the largest amount of IFC financing, in dollar value, among Latin American countries. IFC invested $591million, including $190 million in syndications, in sectors ranging from agribusiness and transportation to manufacturing and the financial sector. IFC’s total portfolio in Brazil was $913 million at June 2005.

IFC’s strategy for Brazil focuses on enhancing clients’ prospects for competitiveness and growth, improving the country’s social equity through voluntary actions by the private sector, and continuing to promote sustainability.

These priorities entail investing in growing, export-oriented companies; helping Brazilian companies expand internationally (including through South-South investments); emphasizing infrastructure and logistics, notably public-private partnerships that expand services to poorer people; and helping build financial and capital markets. IFC also seeks to finance firms committed to environmental and social sustainability, to help improve corporate governance, and to support microfinance and socially-oriented entrepreneurship. Since 1956, when Brazil joined IFC, the Corporation has provided $7.45 billion, including syndications, for 162 companies.


About IFC
The International Finance Corporation is the private sector arm of the World Bank Group and is headquartered in Washington, D.C. IFC coordinates its activities with the other institutions of the World Bank Group but is legally and financially independent. Its 178 member countries provide its share capital and collectively determine its policies.

The mission of IFC is to promote sustainable private sector investment in developing and transition countries, helping to reduce poverty and improve people’s lives. IFC finances private sector investments in the developing world, mobilizes capital in the international financial markets, helps clients improve social and environmental sustainability, and provides technical assistance and advice to governments and businesses. From its founding in 1956 through FY05, IFC has committed more than $49 billion of its own funds and arranged $24 billion in syndications for 3,319 companies in 140 developing countries. IFC’s worldwide committed portfolio as of FY05 was $19.3 billion for its own account and $5.3 billion held for participants in loan syndications. For more information, visit www.ifc.org.


About Suzano

Suzano Petroquímica is the Latin American leader in the production of polypropylene resins and the 2nd largest producer of thermoplastic resins in Brazil.

The company currently has a production capacity of 625 thousand tons per year of polypropylene, distributed within its three facilities located in Mauá (State of São Paulo), Duque de Caxias (State of Rio de Janeiro) and Camaçari (State of Bahia).

ISuzano Petroquímica is a joint controlling shareholder of Riopol and Politeno, polyethylene producers, and Petroflex, synthetic elastomer producer; both products are raw materials for the converters, as the polypropylene.

Contact Information

Adriana Gomez

International Finance Corporation

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