IFC, Morgan Stanley invest in floor company
Updated: 2008-06-11 09:28
The International Finance Corporation(IFC), a member of the World Bank Group, announced Tuesday it had invested $100 million with Morgan Stanley in Nature, one of the largest flooring manufacturers in China.
IFC's investment included a $20 million equity investment and $30 million long-term loan. Morgan Stanley made the other $50 million equity investment. Both companies did not disclose its equity share of the investment.
The money would be used to develop plantation forests in east China's Jiangxi Province and establish a steady supply of certified wood to the floor maker.
Nature plans to increase the use of such independently certified wood gradually to 100 percent. The China Forest Trade Network, the national body of the World Wildlife Fund's Global Forest and Trade Network, will regularly assess the company's progress on this target, according to the IFC.
The Chinese government promotes both ecological conservation and forestry development, as the two are interdependent of each other, said Jia Zhibang, administrator of the State Forestry Administration.
By cooperating with international financial institutions such as IFC and Morgan Stanley, China's forestry industry could expand financing channels, he said.
China is by far the largest growing market of forest products, with annual wood consumption estimated at 337 million cubic meters and wood imports rising at an average of 16 percent a year during the past decade, according to data from the China Timber Distribution Association.
According to Jia, China's total industrial forestry output exceeded one trillion yuan ($142.9 billion) in 2007 with over 74 million cubic meters of artificial board produced, the largest amount in the world.
China was by far the third largest investment destination of the IFC. Focusing on private sector development, the IFC had invested a total of $3.668 billion in 147 projects in China by the end of 2007.