Press Releases
print

IFC Supports Chinese Retail Modernization Through Investment in Supermarket IPO


In Washington:                                                        
Desmond Dodd                                                        Phone: +1 202 473 7194                                                Email:
ddodd@ifc.org                                                        
In Hong Kong:
       

Doug Coulter

Phone: +852 2509 8140

Email:
dcoulter@ifc.org        

In Beijing:

Zhu Wenqin

Phone: +8610 6554 4191

Email:
wzhu@ifc.org


Note: Currency is given in U.S. dollars throughout unless otherwise specified.
Hong Kong, November 21, 2003
—The International Finance Corporation, the private sector arm of the World Bank Group, today agreed to invest $6.5 million in Wumart Stores, Inc., one of the leading retail chain store operators in Beijing, China. IFC’s investment supports Wumart’s international offering on the Growth Enterprise Market, the second board of the Hong Kong Stock Exchange. It will help Wumart expand in the face of increased international competition.


Wumart raised $70 million in its international offering and intends to use the proceeds to partially fund the establishment of 10 hypermarkets, 32 supermarkets and 152 convenience stores over the next two years. It will also finance improvements in the company’s operating, information and logistics systems. Wumart represents the first investment by IFC in a Chinese retail company. IFC's outstanding retail sector portfolio includes $275 million in investments spanning 15 countries.  

 
 
"This investment shows IFC's long term commitment to developing strong local retailers that can compete with international players in the fast-growing Chinese retail market. Support for Wumart at its international offering signals our confidence in the company’s business model and expansion strategy,” said Javed Hamid, IFC director for East Asia and the Pacific. Wumart is the first Chinese non-state owned retailer to issue shares on Hong Kong’s Growth Enterprise Market.


“We are happy to welcome a distinguished investor like IFC to our investor group,” said Dr. Zhang Wenzhong, Wumart’s Chairman and CEO.  “IFC’s investment will strengthen our ability to grow rapidly and offer new services to our customers, while remaining highly competitive in the Chinese marketplace.”


China’s retail sector is undergoing rapid changes resulting from China’s accession into the World Trade Organization. China will end restrictions on foreign ownership in the retail sector by 2005. Heightened competition is leading local retailers such as Wumart to adopt state-of-the-art inventory management, supply-chain management, logistics, marketing and promotion to achieve more efficient retail formats.  


The mission of IFC is to promote sustainable private sector investment in developing countries, helping to reduce poverty and improve people's lives. IFC finances private sector investments in the developing world, mobilizes capital in the international financial markets, helps clients improve social and environmental sustainability, and provides technical assistance and advice to governments and businesses. From its founding in 1956 through FY03, IFC has committed more than $37 billion of its own funds and arranged $22 billion in syndications for 2,990 companies in 140 developing countries. IFC's worldwide committed portfolio as of FY03 was $16.8 billion for its own account and $6.6 billion held for participants in loan syndications.