Packages 2008 Packages Limited (Packages or the Company) is Pakistans premier pulp and paper packaging company that has been an IFC client since 1964.  It is listed on all the three stock exchanges of Pakistan.  The companys product range includes: paper and paper board (brown and white); writing and printing paper; tissue and sanitary products; and, flexible packaging products.  It principally uses wheat straw, recycled and waste paper to produce paper and paper products.  Packages is the market leader in sophisticated and high quality packaging products and the only company that provides complete packaging solutions under one roof in the country.  Packages has strong business relationships with major multinationals operating in Pakistan such as Unilever, Nestle, P&G, Colgate and Tetrapak.   Packages is about to complete its expansion program, started in 2005, to increase capacity to 300,000 tons per annum (tpa) from 100,000 tpa.  To achieve financial stability and secure long term viability, the company proposes to retire some $70 million of debt raised for the expansion and invest some $30.0 million to implement an environmental upgrade program and de-bottlenecking of its plant to enhance operational efficiencies (the Project) and capacity enhancements in its Packaging division.  The total Project cost of some $100 million is proposed to be financed with a combination of equity/quasi equity and internally generated cash from operations during 2009-10 of the company. The project is expected to have the following development outcomes:  - Supporting a Socially Responsible Company:    IFC investment will help ensure continued operation of a socially responsible company that provides direct employment to some 3,450 persons and indirectly impacts the livelihood of some 27,000 persons linked with its supply chain whose economic activity would otherwise be uncertain.      Packages actively engages with the community around its two sites. Several community development projects are ongoing at BSPM including provision of a deep tube well for drinking water; renovations to school buildings and provision of safe drinking water and sanitary facilities at 9 schools that have over 2,000 total enrollments; and widening of the road serving the factory to facilitate to promote greater economic activity in the s surrounding areas.   - Environmental Improvements at Lahore and BSPM:    IFC financial package will help the company to further reduce emissions and residue, which will lead to more environmentally and socially friendly production facilities at both the sites.  This is also expected to have a strong demonstration impact on other local pulp and paper producers.  Private Sector Development    BSPM is located away from the key centers of commercial activity and would generate economic activity in what is otherwise an agrarian-based and under-developed part of the country.  The companys increased procurement of wheat straw will positively impact farmers incomes, who normally burn wheat straw for disposal.  An increase in waste paper procurement will positively impact the income levels of waste paper collectors who typically belong to the poorest sections of the society.  The companys also contributions to national exchequer by way of import and corporate taxes.  Climate Change Benefits     The Project is expected to have a strong climate change impact by reducing carbon emissions related with burning of wheat straw; transportation saving on shipping of waste paper from other countries; and, elimination of approximately 450,000 cubic meters of land fills annually.  Land filling has such negative environmental impacts as contamination of ground waters, residual soil contamination after landfill close, contribution to inefficient use of land space and off-gassing of methane, a potent greenhouse gas, generated by decaying organic wastes.