Invertec Pesquera Mar de Chiloé S.A. II Invertec Pesquera is a vertically integrated sea farming company that produces mainly Atlantic salmon, Pacific salmon and trout in the region of Chiloé in the southern part of Chile. The purpose of the project is to increase Pesquera's production capacity and further improve technology, marketing, and environmental management in order to attain a leading position and to be able to remain competitive in a global market. The project will result in an increase in capacity of salmon farming from 20,000 tons per year in 2001 to an estimated 35,000 tons per year in 2005. IIC's participation is important for the reasons set out below. Furthering the competitiveness of a Latin American company: The salmon sector is rapidly changing, requiring companies to grow to remain competitive worldwide. The project will help to maintain the competitiveness of Pesquera, one of Chile's leading companies in the sector. If this financing does not take place, a Latin American company that has proved to have the conditions to be a leading company in the global market will probably never reach its potential. Strengthening a strategic sector in Chile: With the project the IIC will be financing a very important sector for Chile's economy. Because of its comparative advantages, Chile has the conditions to become the world's largest salmon producer by the end of the decade provided the country has access to adequate financing. Providing adequate long-term financing: Pesquera, unlike companies in industrialized countries, doesn't have access to adequate sources of funds. Consequently, it would not be able to implement the project without IIC long-term financing. IIC's financing will allow the Company to expand. IIC's participation is also considered very important for the credibility it gives to the Company when listed. Catalytic effect and leverage: IIC's co-financing program will allow the Company to access financing from international banks. The financial plan calls for $2.25 from international banks for each dollar to be financed by the IIC. Diversifying exports: Chile traditionally has relied heavily on the export of mining products. In the last two decades, the country has been working on diversifying its exports. This project will have a major impact on this diversification effort, as it will increase the export of a non-mining product. Promoting good corporate governance practices: The IIC will be supporting a company which has adopted sound corporate governance practices and the Invertec group a socially-conscious corporate citizen with many community-oriented projects. Decentralizing job creation: The project will create new direct and indirect jobs mainly in the remote region of Chile where the Company is located. Improving technology: A component of the financing will be used for the company to develop its scientific and technological expertise. Invertec Pesquera is a vertically integrated sea farming company that produces mainly Atlantic salmon, Pacific salmon and trout in the region of Chiloé in the southern part of Chile. The purpose of the project is to increase Pesquera's production capacity and further improve technology, marketing, and environmental management in order to attain a leading position and to be able to remain competitive in a global market. The project will result in an increase in capacity of salmon farming from 20,000 tons per year in 2001 to an estimated 35,000 tons per year in 2005. IIC's participation is important for the reasons set out below. Furthering the competitiveness of a Latin American company: The salmon sector is rapidly changing, requiring companies to grow to remain competitive worldwide. The project will help to maintain the competitiveness of Pesquera, one of Chile's leading companies in the sector. If this financing does not take place, a Latin American company that has proved to have the conditions to be a leading company in the global market will probably never reach its potential. Strengthening a strategic sector in Chile: With the project the IIC will be financing a very important sector for Chile's economy. Because of its comparative advantages, Chile has the conditions to become the world's largest salmon producer by the end of the decade provided the country has access to adequate financing. Providing adequate long-term financing: Pesquera, unlike companies in industrialized countries, doesn't have access to adequate sources of funds. Consequently, it would not be able to implement the project without IIC long-term financing. IIC's financing will allow the Company to expand. IIC's participation is also considered very important for the credibility it gives to the Company when listed. Catalytic effect and leverage: IIC's co-financing program will allow the Company to access financing from international banks. The financial plan calls for $2.25 from international banks for each dollar to be financed by the IIC. Diversifying exports: Chile traditionally has relied heavily on the export of mining products. In the last two decades, the country has been working on diversifying its exports. This project will have a major impact on this diversification effort, as it will increase the export of a non-mining product. Promoting good corporate governance practices: The IIC will be supporting a company which has adopted sound corporate governance practices and the Invertec group a socially-conscious corporate citizen with many community-oriented projects. Decentralizing job creation: The project will create new direct and indirect jobs mainly in the remote region of Chile where the Company is located. Improving technology: A component of the financing will be used for the company to develop its scientific and technological expertise.