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Largest Czech paper mill gets EBRD loan
Through a DM 111 million (ECU 58.9 million) loan from the European Bank for Reconstruction and Development (EBRD), the largest Czech pulp and paper mill company, Sepap Steti a.s.(Steti), is to modernise its production facilities, increase its pulp and paper production capacity, and improve the quality of its paper production. The agreement was signed in Prague today.
At the signing, Jiri Huebner, Director of the EBRD's Czech Team, said: “This project will play an important role in the Czech economy by strengthening one of its competitive sectors and increasing exports. The new investments will allow Steti to compete directly with the best international pulp companies and will boost employment”.
Financed by long-term debt, the investment programme “Steti 2000” consists of specific new investments to upgrade the company's production facilities. Improvements include a new bleaching plant, the reconstruction of the recovery boiler and pulp dryer, and other investments to reduce costs and improve quality and infrastructure. This project will also improve the environment and increase competitiveness by investing in state-of-the-art technology for totally chlorine free (TCF) pulp production.
Steti and the EBRD have agreed to syndicate DM 35 million of the loan among a small number of international banks.
Owned by Sepap (77.3 per cent) and Swedish conglomerate AssiDoman (22.7 per cent), Steti was created in the first wave of Czech privatisation in May 1992. As an integrated pulp and paper manufacturer with a focus on packaging paper, its sales are fairly balanced between the domestic market (with 52 per cent of sales) and exports (primarily to Germany and Italy).
Steti is the biggest employer in the city of Steti and a major one in the whole region, therefore the loan will enhance the prospects of its almost 2,700 employees.
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