Company name

Inversiones Selva C. A.

Project number

VE1017C-01

Category C projects are those that are likely to result in very limited or no adverse environmental or social impacts or risks.

E&S category
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C

Country

Venezuela

Sector

Manufacturing

Status

In implementation

Disclosed date

08/20/2002

Projected date at which a project will be put forward for the Board of Executive Directors’ approval.

Projected board date
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09/25/2002

Approval date

09/25/2002

Signed date

11/18/2002

Sponsoring entity

N/A

Team leader

Perez Silva, Alfonso

Investment type

Financing requested

N/A

Syndicated amount

N/A

Financing amount

N/A

Currency

USD

Project scope and objective

The purpose of the project is to preserve the company's economic and financial viability and consolidate the results obtained over more than thirty-five years of operations.

The project has four basic components:

Refinancing short-term debt
Financing permanent working capital
Expanding production capacity
Moving the offices from Caracas to Maracay

Provide long-term financing for a company with access to several export markets: Selva exports industrial and consumer products to the Caribbean, the Andean region, the United States (especially Puerto Rico), and Mexico.

Generate more foreign currency to make the company less vulnerable to depreciation risk: Over the past three years Selva's exports have been trending upward, going from $7.6 million in December 1999 (15% of total sales) to $14.8 million in December 2001 (20% of total sales). The project will double the percentage of exports to total company revenue.

Preserve more than one thousand jobs in difficult times: The long-term funding from the IIC will enable the company to cut costs by reducing interest expense, thus saving jobs at the company. Inversiones Selva (including Vasos Venezolanos) has 1,131 employees.

Support a company that provides consulting services to small and medium-size companies: Selva provides consulting, design, and printing services for small and medium-size industrial customers. It provides technical assistance and works with customers to design the desired products.

Improve efficiency in allocating scarce resources: By decreasing the average weighted cost of financing in dollars, the company will be able to save $5.3 million in interest expense that it can then allocate to production in order to double total exports.

Generate economies of scale by decreasing average production costs: The project seeks to centralize a large part of Grupo Selva's operations in the same area. This will automatically reduce distribution and transportation costs and make it easier for the companies to cut production costs and thus generate economies of scale. Ultimately, production will increase at the same cost or remain the same at a lower cost.

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Environmental and social review

IDB Invest conducts an environmental and social due diligence (ESDD) commensurate with the nature, scale, and stage of the project, and with its level of environmental and social risks and impacts. The ESDD will confirm the project E&S categorization and assess the project with respect to the client requirements in IDB Invest Environmental and Social Sustainability Policy. The results of the ESDD, including any identified gaps are described in the Environmental and Social Review Summary (ESRS) provided below. Any gaps with respect to the IDB Invest Sustainability Policy at the time of the ESDD are addressed in the Environmental and Social Action Plan (ESAP) provided below.

ENVIRONMENTAL AND SOCIAL REVIEW

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Contact information

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EMAIL

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PHONE

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ADDRESS

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