WASHINGTON, D.C., October 26, 1998 ---
The International Finance Corporation will invest US$14.4 million in Settavex,
the largest integrated textile company in Morocco, to help it move to producing
higher value-added products.
IFC will provide a US$5.4 million loan and an equity investment of up to
US$9 million. Settavex is responding to strong competition in the
industry by undertaking a US$46 million upgrading and expansion project
to shift part of its output from commodity-like basic articles to higher-margin,
more refined differentiated articles such as gabardines, khakis, chinos
and corduroys. Settavex, which specializes in the production of denim
fabric, is 100 percent owned by Tavex Algodonera, a leading European manufacturer
This investment program will help Settavex respond to global market trends
and maintain its competitive edge by adding manufacturing flexibility.
It will help Moroccan garment manufacturers to be more responsive in an
industry where a quick turnaround time is critical, allowing them to take
fuller advantage of Morocco's proximity to Europe.
In the first phase of its expansion, in 1998-1999, Settavex will invest
US$28 million in a dyeing and finishing facility and a 3.4 MW power generation
plant. Settavex will later invest US$18 million to improve its spinning
and weaving capacity. The company sought IFC funding for the first phase
of the project.
In a signing ceremony today, Mr. Mohsen Khalil, IFC's Director of the Central
Asia, Middle East and North Africa Department said that the investment
would build on Morocco's competitive advantage in the textile sector and
enable Settavex to be responsive to its clients by providing just-in-time
delivery. Mr. Enrique Garrán, Chief Executive Officer of Tavex added
that cooperation with IFC should offer enhanced opportunities for the Group
not only in the European markets, but also in other regions of the world
where the company has a strategic interest.
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.