PAKENSO Project Summary Of Project Information (SPI)       Project Name    Russia-Pakenso              Region    Europe        Sector       Project No008987   Projected Board DateMay 30, 1998   Company NameZAO Pakenso   Technical Partner and/or Major Shareholders    	The primary sponsor of the project will be the packaging company Pakenso Oy, a wholly owned subsidiary of the ENSO Oyj, a leading paper company in Europe. Pakenso is a market leader in corrugated board production in Northern Europe. In 1997 Pakensos sales reached US$280.6 million equivalent and its profit was US$25.1 million equivalent. Pakensos business strategy is to become the market leader in corrugated board production within the territory of its operation -- which includes Finland, Sweden, Baltics, Eastern Europe and Russia -- where it currently holds second place after Assi Doman. As a part of its expansion strategy, in 1994 Pakenso set up a sheet plant in Estonia and in 1996 a corrugated board plant in Latvia.    Project Cost Including proposed IFC investment    	The total project cost is US$40 million. The IFC investment under consideration is:(i) an A loan of US$6 million; and (ii) an equity investment of approximately US$1.5 million for 12% of a Russian company, ZAO Pakenso.    Location of project and Description of site    	In 1997 Pakenso purchased 9 ha site in town Balabanobo, 100 km south-west of Moscow, to build a new corrugeted board plant. Pakenso will renovate an old building located on the site and build a new warehous for raw materials and finished goods. The total area occupied by the plant and a warehose will be 14,000 sq. m. The machinery for the plant will be all new and modern, except for two converting machines which will be up-graded and moved from Pakensos Finnish and Swedish plants.     Description of Company and Purpose of Project    	Pakenso has formed a Russian subsidiary, ZAO Pakenso, to build and operate a corrugated box production facility. This facility will be able to produce 90 million sq. m. of corrugated board per annum and convert it into customized boxes. Paper for the production of corrugated boxes will be purchased from the sponsor as well as from several other european paper producers.          	A significant portion of output will be purchased by the fast growing consumer sector in the Moscow region. ZAO Pakenso will be able to leverage and further expand the currently established client network by providing its clients with: (i) high quality corrugated boxes at a lower price; (ii) reliable supply; and (iii) superior service.     	IFC will play a catalytic role in the project by encouraging the Sponsors current and potential future investments in Russia. IFCs technical assistance program will be beneficial in identifying potential Russian suppliers of raw materials for the Pakenso project. IFC will provide long-term financing for the project which would not otherwise be available on reasonable terms.     Environmental Category and Issues    	This is a category B project according to the IFC environmental review procedure. Environmental, occupational health and safety issues associated with this project include: current land use at the new plant; adhesive characteristics eg. solvent based, water based etc; ink characteristics; liquid effluents; workplace health and safety (guarding, ventilation); fire and safety; and sustainable sources of raw material.        	   	Pakenso will conduct an examination of the site to ensure that there is no past contamination. The adhesive used in the process is starch and contains no solvents. The inks are water based and do not contain any heavy metals. Pocess washing water and  sanitay effuent is conveyed to the municipal treatment plant. Health and safety issues relate largely to noise. Pakenso will use silencers. The factory wll be equiped with water reservior, sprinkler system, smoke detectors, and hand extinguishers. The Sponsor has demonstrated that the project will comply with the World Bank policies and environmental guidelines.     The  is  from the Public Information Center.       Date SPI sent to PIC     April 29, 1998      This Summary of Project Information is prepared and distributed to the public in advance of consideration of the proposed transaction by the Corporations Board of Directors.  It is provided for the purpose of enhancing the transparency of IFCs activities and should not be construed as presuming the outcome of IFC Board consideration.    For Additional Information contact:  Corporate Relations Unit -   telephone: (202) 473-7711   facsimile: (202) 974-4384  Environmental documents for this project are available at http://www.ifc.org and from the World Bank InfoShop (http://www.worldbank.org/html/pic/aboutinfo.html).