La Universal, S.A. Summary Of Project Information (SPI)       Project Name    Ecuador-La Universal, S.A.            Region    Latin America & Caribbean        Sector       Project No009132   Projected Board DateNovember 30, 1998   Company NameLa Universal, S.A.   Technical Partner and/or Major Shareholders    	Until 1992, La Universal was owned by members of the Norero, Segale, Toscanine and Costa families.  In that year, Nabisco made an offer to acquire majority ownership of La Universal and members of all owning families decided to sell their shares.  Mr. Domingo Norero who then owned 14% of La Universal, objected.  Via a leveraged buyout in November 1992, Norero purchased shares of the owning families mentioned above and acquired majority control of La Universal to prevent its sale to Nabisco.  Today, the Company is wholly owned by Domingo Norero.     Project Cost Including proposed IFC investment    	The total project cost is US$36 million, of which 50% relates to a refinancing of short-term, residual debt from Norero''s LBO and 50% relates to new fixed asset investments.  IFC''s own investment will amount to US$13.2 million, including an US$8.2 million A Loan and an equity investment of up to US$5 million.      Location of project and Description of site    	La Universal is located in Guayaquil, Ecuador.  It''s existing plant was constructed in 1927.  The factory is vertically oriented, comprised of three floors with total area of 17,684 m2 built around a central atrium.      Description of Company and Purpose of Project    	La Universal, S.A. was founded in 1889 in Guayaquil by Emilio and Juan Bautista Segale who acquired a small factory and began producing cookies and chocolate bars.  Today, La Universal ranks as one of Ecuadors leading confectionery and food companies.  Its products are chocolate and consumer cocoas; hard and soft candy; pasta, cookies, crackers; and semi-finished goods for industrial use including cocoa powder, butter and liquor.           The Project involves: (i) upgrading the existing plant, including select investments to eliminate bottlenecks; (ii) the re-engineering of the Companys production layout to increase capacity and improve efficiencies; (iii) construction of a new warehouse and distribution facility; and (iv) the refinancing of existing short-term debt.     IFC Role    The proposed financing for La Universal would represent IFCs first investment in an industrial manufacturing company in Ecuador since the 1970s.  IFCs support of La Universal would help a viable  Ecuadorian company continue its pattern of growth within the Andean region and through exports beyond. This support would be fully consistent with the objectives of IFCs country strategy for Ecuador which call for investments in  companies with good growth potential and where IFCs investment will encourage further development and improved governance in the gravely underdeveloped manufacturing sector.         IFCs role as  catalyst is central in this transaction.  The proposed IFC investment would provide La Universal with much needed capital and long-term  financing to imrpove the maturity profile and average cost of its debt. Long-term finance is unavailable in Ecuador. Indeed, the Company currently faces real local interest rates of 15-20% in US Dollars with tenors limited to a maximum of 2 years with quarterly amortization of principal and no grace on most credits.  The Commonwealth Development Corporation of the UK has indicated its interest in making a parallel equity investment of up to  US$10 million provided that IFC itself makes an investment in La Universal.          Development Impact    Ecuadors history of volatility has made for a difficult operating environment for its private sector companies.  Nonetheless, La Universal has a long tradition within the Ecuadorian food industry and has developed impressive market shares for its products. IFCs support of La Universal would provide assistance during a critical period of transition and help a viable Ecuadorian company continue its pattern of growth domestically and through exports abroad. The Ecuadorian economy is dominated by traditional export products such as oil, bananas, shrimp and sugar. In dialogues with IFC and other multilaterals, Government authorities have specifically called for supporting the development of its non-traditional sectors and value-added industries.     La Universal is one of relatively few private sector industrial companies which fit this profile. In addition, La Universal sources nearly 100% of its cocoa, milk, flour and sugar needs locally. It provides value-added processing to Ecuadors raw materials and serves as an example of how to market and export products outside Ecuador. The Government of Ecuador is encouraging further development of Ecuadors cocoa industry as an export item.  La Universal itself processes 10-15% of the Ecuadorian cocoa crop, and its Management has played an active role in the policy dialogue concerning this sector.      Environmental Category and Issues    	This is a category B project according to IFC''s environmental review procedure.  Key environmental, social and health and safety issues associated with this project include:  current and past land use, social impacts from workforce reductions, liquid effluents, solid waste disposal, air emissions, power and water supply, use of appropriate refrigerants, hygiene and housekeeping, workers safety and training, emergency response and fire protection.  La Universal''s existing factory is located in the south section of the City of Guayaquil and is surrounded by the Guayas River.  The proposed expansion will be developed in an existing three level building with an area of 5000 square meters.  La Universal''s management discharged all union employees and paid all required separation and other wages due, for a total cost of US$7.4 million.  Liquid waste generated during the cleaning of the manufacturing areas and sanitary uses will be discharged to the municipal sewer system for its treatment.  La Universal''s Biochemical Oxygen Demand (BOD) parameter is not in compliance with World Bank guidelines.  La Universal has agreed to prepare a Corrective Action Plan (CAP) to address this issue, which will be resolved by December 31, 1999.  Air emissions from the cocoa roasting area will be recirculated and discharged through a dust collection system.  Personal protective equipment such as dust masks will be provided to employees in areas susceptible to air borne non-toxic food dust.  Potable water is brought in tanks to the company on a daily basis.  The company has planned the installation of a 400 cubic meter per day water treatment plant to filter water from the adjoining river.  La Universal will develop an emergency and preparedness program for its facility.    The  is  from the InfoShop.       Date SPI sent to InfoShop     October 30, 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).