IFC helps Fenglin take sustainable road for development

By Zhu Wenqian (China Daily) Updated: 2014-10-08 07:57

Fenglin Group officials introduce a tree plantation project to International Finance Corporation representatives in Nanning, Guangxi Zhuang autonomous region. CHINA DAILY

Guangxi Fenglin Wood Industry Group Co Ltd, a Shanghai-listed fiber board manufacturer, has charted a sustainable growth plan for the future that hinges on the production of green and responsible wood products.

The company, based in the less-developed Guangxi Zhuang autonomous region in Southwest China, recently received a loan of 186 million yuan ($30 million) from the International Finance Corporation, a member of the World Bank Group.

The five-year yuan loan will help Guangxi Fenglin set up a new plant in Guangxi and upgrade an existing production facility in the neighboring Guangdong province, according to company officials.

The program will make use of scrap wood and residual waste as their primary raw material, thereby promoting resource efficiency and sustainability, the IFC said.

More than 200 direct jobs are expected to be created at the company's plants and to benefit about 2,000 farmers who can make a profit from collecting and supplying waste wood.

"For Fenglin, there was a market opportunity with regard to sustainably utilizing wood products, and at the same time growing a company that would be based on international standar

"There is a high positive impact from the investment, whether it's in terms of environment, reducing green house emissions, or improving the livelihood of people in the rural areas. This is a huge value that Fenglin has brought to the private sector and to China," Finkelston said.

China produces more than 60 percent of the world's wood panels and other related products, and is the biggest exporter followed by Germany, Italy, Poland, and the United States. Since China lacks forestry resources, most of its wood products are often expensive.

Fenglin, a fiber board manufacturer that serves major furniture, flooring, door, and decoration companies across China, currently owns about 35,000 acres of forest, which absorbs 360,000 tons of carbon dioxide, and releases 320,000 tons of oxygen, according to the company.

Despite a sluggish property market and falling demand for interior decoration, Fenglin's revenue jumped 43.7 percent year-on-year during the first six months of this year.

The company also managed to carve a niche for itself in the domestic market with its differentiated products, such as flame-resistant boards and moisture-proof boards.

Cui Jianguo, chairman of Fenglin Group said: "The IFC loan enables our company to access long-term financing that is not readily available in the market and is key to our strategic development and expansion plan.

The new plants will help us offer complementary products lines and improve our economies of scale. We can therefore manufacture more environmentally-friendly products and provide jobs to local communities."