WOOD FURNITURE: FOCUS ON SUSTAINABLE SOURCING Commitments in this subsector constitute a small but growning portion of the portfolio. IFC helps client companies adopt sustainable business practices, including better financial management and certified procurement practices for the growing number of commercial customers that insist on sustainable supply chains. Eco friendly Furniture in Vietnam Khai Vy Corporation is a local entrepreneurial success story; a company that started small only 12 years ago. Today, with revenues topping $35 million, the environmentally friendly furniture exporter operates four factories across Vietnam. An impressive international customer base includes major retailers, such as Carrefour and Costco, that are committed to sustainable sourcing of products. • IFC’s $6 million in financing and advisory services are supporting a new round of growth and helping the company achieve the highest environmental, social, and corporate governance standards. • With expansion, Khy Vy will employ 8,000 people, with higher-than-average wages, advancement opportunities, and strong worker safety standards. • Khy Vy’s is transitioning to certified wood; the goal is a supply chain that is 100 percent Forest Stewardship Council-certified. • Strong business model contributes to steady growth: low-cost, skilled, and productive labor force with long-standing expertise in furniture making; Vietnamese location and competitive pricing reduce customers’ reliance on other external sources; rapid response, and fast turnaround on customer design specifications. Paul Maitland is one of the largest furniture manufacturers in Southeast Asia, with three manufacturing facilities in Vietnam and 9,000 employees worldwide, nearly all of whom are based in Vietnam. The company makes highquality European-style furniture under the trade names of Theodore Alexander and Atelier de la Madeleine. IFC’s long-term $8 million loan is helping the company expand two production facilities in Ho Chi Minh City for new product lines. In a country where access to longer-term finance is limited, IFC’s ability to offer long-term financing is critical to the company’s ability to meet increasing international demand for its high-quality products with shorter delivery times. IFC will also help the company achieve wood certification for its plantation and entire wood supply chain.

® 2007 INTERNATIONAL FINANCE CORPORATION 2121 Pennsylvania Avenue, N.W. Washington, D.C. 20433 U.S.A. Telephone: 202 473-1000 Facsimile: 202 974-4384 Internet: www.ifc.org Printed on material that meets international environmental standards and is from sustainably managed commercial forests. FORESTRY: ENHANCING ECONOMIC GROWTH IN EMERGING MARKETS PROMOTING CHANGE IN THE MARKETPLACE IFC’s leadership in innovative forestry investments includes support for new private equity sustainable forestry funds: • The rapid growth in IFC investments by both local and global players (see graph below) reflects the increased appreciation of our added value in the forest product sector • We help small land owners earn more income and increase land value • Activities include reforestation of dry, eroded land. Innovation: The Way Forward An IFC-financed study is exploring new ways to take advantage of nonwood-based pulp to fill wood fiber shortages in China in environmentally friendly ways. It is a tough challenge for a nation where serious pollution threatens the health and welfare of citizens. IFC is leading the search for a solution that uses abundant natural resources, preserves the livelihood of millions, and fills shortages while reversing past environmental damage and protecting the environment from additional harm. Packages, a pulp mill based in Pakistan supported by $30.4 million in IFC financing, is developing a more effective chemical recovery process to clean straw-based pulp. The company plans to license its state-of-the-art technology for use throughout China, India and Pakistan. IFC’s Forestry Sector Portfolio IFC’s forestry sector projects span the entire supply chain. Our clients include global, local, and regional players around the world. Our efforts support businesses large and small, with particular attention to building local supply chains that have embraced sustainable forest practices. For more information about IFC’s financial products and advisory services in the forest products sector, please contact: Ole Sand 1-202-473-9134 or osand@ifc.org Kai-Eric Volmari, 1-202-458-8673 or kvolmari@ifc.org Dwight O’Donnell, 1-202-473-8428 or dodonnell@ifc.org Sharmila Hardi 1-202-473-7259 shardi@ifc.org Solid Wood Products 1% (including furniture) Paperboard (including boxboard, fiberboard) 9% Wood Panels and Engineered Wood Panels 25% Paper for Writing and Printing 15% Pulp Mills 22% Newsprint 6% Other Paper 5% Sawmill 2% Other Packaging Products 6% Paper Tissue 6% Forests 3% OUR CLIENTS: GLOBAL AND LOCAL FOREST PRODUCTS SUBSECTOR COMMITMENTS