The International Finance Corporation (IFC), the private lending arm of the World Bank Group, has injected US$60 million into KES Group, Vietnam’s largest producer of engineered wood panels and a leading provider of innovative solutions for the construction and interior industry.

Ho Chi Minh City-headquartered KES is expanding production in a project that the IFC says will cost US$92 million – US$60 million coming from the IFC and the balance from the company’s internal cash.

The company’s production footprint consists of six factories in southern Vietnam, with four operating in Binh Phuoc province and two in those of Binh Phuoc and Dong Nai.

Production focuses on medium-density fibreboard (MDF) and high-density fibreboard, but both groups are collectively called MDF.

The project’s operational footprint, according to the IFC, includes two MDF factories with total production capacity of 500,000 cubic metres per annum, one flooring factory with a production capacity of 6.5 million square metres per annum, and one melamine paper printing and dipping factory with a production capacity of 40 million square metres per annum.

At the second MDF factory, KES is about to launch a greenfield glue factory and warehouse with an annual production capacity of 140,000 tonnes.

The third MDF facility will open in 2025 in Binh Phuoc and the fourth MDF production site will be commissioned in 2028 in Dong Nai.

This new investment, the IFC notes, is a Category B project in accordance with its 2012 policy on environmental and social sustainability. Key environmental and social risks and impacts from this project are limited, site-specific and can be readily addressed through generally accepted mitigation measures described in the World Bank Group’s Environmental and Social Action Plan.