Ballarpur International Graphic Paper Holdings B.V.

General

IFC is considering a potential investment consisting of debt and/or equity in Ballarpur International Graphic Paper Holdings (BIGPH), a company incorporated in the Netherlands. BIGPH owns subsidiaries which are leading pulp and paper manufacturers in India and Malaysia. BIGPH is a step-down subsidiary of Ballarpur Industries Limited (BILT or the Company and BILT together with its subsidiaries referred to as the Group), which is head quartered in India and is an IFC investee company (# 10066 in 2000) and (# 20798 in 2003). Part of the investment proceeds may be directed to Sabah Forest Industries (SFI), whose operations are located in Sabah state of Malaysia.

Objectives

1. The Company will support rural households by sourcing wood from several thousand farmers, including marginal ones. In its existing locations, the Company helps farmers use more modern farming techniques to improve yield and provides an incentive to farms to meet quality standards. 2. IFC has shared with the Company some of the best available technology and practices to increase the efficiency of the forestry operations. Throughout the investment, IFC will support the Company''s efforts to implement the changes and improve its operations. 3. The Project will implement and obtain FSC or a similar certification of sustainable forest and land management that conserves biodiversity, soil and water resources and safeguards the health and ecological functions of ecosystems, and lead to a strong demonstration effect. 4. The pulp & paper industry in India remains fragmented. BILT is one of two high grade product (coated paper) producers in the country, and much of the demand is imported. Supporting the Company through restructuring will thus contribute to the overall modernization of the industry.