Morris Hong Kong (IFC-40057)

Countries
  • Cambodia
  • China
Where the impacts of the investment may be experienced.
Specific Location
Haining, Zhejiang-China and Prey Nob District, Sihanoukville-Cambodia
Whenever identified, the area within countries where the impacts of the investment may be experienced. Exact locations of projects may not be identified fully or at all in project documents. Please review updated project documents and community-led assessments.
Financial Institutions
  • International Finance Corporation (IFC)
International, regional and national development finance institutions. Many of these banks have a public interest mission, such as poverty reduction.
Project Status
Approved
Bank Risk Rating
B
Risk rating varies among banks and may refer only to the particular investment and not to the risk for the project as a whole. Projects marked 'U' have an 'Unknown' risk rating at the time of disclosure.
Voting Date
Jan 4, 2018
The estimate day the bank will vote on a proposed investment. The decision dates may change, so review updated project documents or contact the EWS team.
Borrower
MORRIS HOLDINGS LIMITED
The holder of the loan, grant, or other investment.
Sectors
  • Construction
  • Industry and Trade
The service or industry focus of the investment. A project can have several sectors.
Investment Type(s)
Loan
The categories of the bank investment: loan, grant, etc.
Investment Amount (USD)
$ 26.00 million
Value listed on project documents at time of disclosure. If necessary, converted to USD$. Please review updated project documents for more information.
Project Cost (USD)
$ 103.50 million
Value listed on project documents at time of disclosure. If necessary, converted to USD$. Please see updated project documentation for more information.
Primary Source

Original disclosure @ IFC website

Updated in EWS Jan 12, 2018

Disclosed by Bank Jan 8, 2018


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Project Description
According to the bank website, Morris Holdings Limited (“Morris” or the “Company”) is a publicly listed company and a global leader in the upholstered sofa industry. With a market capitalization of approximately US$200 million and 2016 sales of approximately US$141.5 million, the Company is the second largest upholstered sofa manufacturer in China in terms of export value to the U.S. Morris integrates the functions of design, research and development, manufacturing, online and off line sales, and after sales services. The proposed IFC investment will support Morris’ capacity expansion program for i) additional production facilities and working capital in both Cambodia and China in order to address production bottlenecks and growing demand and ii) refinancing of short term debt (together, the “Project”). South-South Investment and Higher Operational Efficiencies: Cambodia: The Project entails the transfer of knowledge and technical expertise as well as foreign direct investment from China to Cambodia, developing a stronger South-South value chain in the forestry and wood products sector. As a supplier to demanding U.S. and Canadian markets with stringent industry standards, Morris is well-placed to disseminate these practices to less developed countries. The adoption of best industry practices is expected to strengthen technological capacity and bring process improvements to the furniture industry in Cambodia, improving competitiveness at a larger scale than what is currently prevalent in the country. China: In addition, the China component of the Project will help the Company achieve even greater economies of scale in China, leading to more competitive products for domestic consumption as well as export markets. The planned expansion in China is expected to increase the Company's production by 30%. The proposed Project would build a new production facility in Sihanoukville Special Economic Zone (SSEZ) in line with IDP's vision. By undertaking a phased approach that starts with textile-based production (sofa covers) the Company is utilizing Cambodia's existing comparative advantages but is planning to invest in training and skill-building necessary to transition to furniture manufacturing and assembly. A successful outcome of the project is expected to demonstrate to international investors that Cambodia is a viable place of origin for high quality furniture and potentially attract new players. Furthermore, the Project is expected to have a positive impact on the local economy by upgrading the domestic manufacturing industry, diversifying exports, and integrating the country into new global value chains, thus strengthening its resilience to economic shocks.
Investment Description
  • International Finance Corporation (IFC)
Private Actors
Morris is 75% owned by Morris Capital Limited, a British Virgin Islands-incorporated holding company which is owned 85% by the Mr. ZOU Gebing (the “Sponsor”) and 15% by his wife Ms. WU Xiangfei. The other 25% of Morris is owned by public shareholders.
Contact Information
Morris Holdings Limited Mr. ZOU Gebing Chairman & CEO +86573-87266779 morriszou@morriszou.com 500 Youquan Road, Haining, Zhejiang 314400, People’s Republic of China www.morrisholdings.com.hk ACCOUNTABILITY MECHANISM OF IFC The Compliance Advisor Ombudsman (CAO) is the independent complaint mechanism and fact-finding body for people who believe they are likely to be, or have been, adversely affected by an IFC or MIGA- financed project. If you submit a complaint to the CAO, they may assist you in resolving a dispute with the company and/or investigate to assess whether the IFC is following its own policies and procedures for preventing harm to people or the environment. If you want to submit a complaint electronically, you can email the CAO at CAO@worldbankgroup.org. You can learn more about the CAO and how to file a complaint at http://www.cao-ombudsman.org/