BUCHAREST, ROMANIA, November 3, 1998 ---
The International Finance Corporation today signed an agreement with Krupp
Compa Arcuri S.A. to provide a DM20 million loan for construction and operation
of an automotive leaf spring and coil spring production facility in Sibiu,
Krupp Compa Arcuri S.A. is a joint venture between Krupp Hoesch Federn
GmbH (73 percent), Europe's leading producer of leaf springs, and Compa
S.A. (27 percent), a long-established Romanian automotive component manufacturer.
The plant is expected to become Krupp Hoesch Federn's principal source
of leaf springs for the wider European market. It will produce 30,000
tons per year of the springs which provide suspension for commercial vehicles.
Coil springs will be produced for the Eastern European markets.
IFC is providing a loan of DM14 million for its own account and is syndicating
an additional DM6 million with ING Bank Deutschland. The sponsors
are financing the balance of the DM55 million project cost.
This Romanian joint venture follows an earlier one between another Krupp
Group company (Krupp Bilstein GmbH) and Compa S.A., that recently obtained
IFC financing to produce automotive shock absorbers for export to Western
European original equipment manufacturers and Romanian market. The
two joint ventures combined are expected to employ up to 2,000 people and
generate annual export earnings of up to US$50 million.
Mr. Gerhard Liedl, General Manager of Krupp Compa Arcuri and Mr. Harold
Rosen, IFC Director for Central and Southern European Operations signed
the loan agreement at IFC's mission in Bucharest. Mr. Rosen, who will be
meeting with the Prime Minister of Romania and other members of the cabinet
during his visit, said that both Krupp Compa Arcuri and Krupp Bilstein
Compa are excellent examples of joint ventures which create new employment,
increase export earnings and, most importantly, support the transition
to a market economy through Romanian companies that are internationally
competitive. Mr. Rosen congratulated Compa management for seeking
out foreign joint venture partners and urged other Romanian enterprises
to follow that example.
IFC, part of the World Bank Group, fosters economic growth in the developing
world by financing private sector investments, mobilizing capital in the
international financial markets, and providing technical assistance and
advice to governments and businesses.