Bangkok, Thailand, October 29, 1999 — The
International Finance Corporation will help a leading manufacturer of ceramic
floor and wall tiles in the Philippines to undertake a US$30 million financial
and operational restructuring by investing up to US$15 million in Mariwasa
Manufacturing, Inc., and its subsidiary, together known as MMI.
MMI—with consolidated annual sales of $36 million and total assets of
$115 million—supplies about 40 percent of the ceramic tile market in the
Philippines with its well-established "Mariwasa" brand. In 1997,
it expanded production capacity by establishing a state-of-the-art plant
in a Batangas City industrial zone to improve efficiency and satisfy anticipated
increases in domestic demand. The unavailability of long-term financing
and significant drop in demand for building materials following onset of
the Asian crisis prevented MMI from completing its planned expansion and
The major MMI shareholders are the Co Seteng family and the Siam Cement
Group of Thailand. The Co Seteng family has 33 years of experience in the
ceramic tile business in the Philippines. The Siam Cement Group is Thailand's
largest ceramic tile producer.
IFC's financing consists of a senior loan of the yen equivalent of $12
million and a subordinated loan of $3 million. IFC also assisted MMI in
developing a restructuring plan to reduce the company's debt burden, increase
the average tenor of borrowings, and concentrate production in the most
efficient plant. As a result of the restructuring, MMI expects to be in
a much stronger financial position.
IFC Vice President Mr. Jemal-ud-din Kassum said the restructuring is a
good example of cooperation between leading Thai and Philippine companies
that will assist the regional building materials industry to recover through
consolidation and increased operating efficiency . The project is expected
to provide a model of restructuring that similar companies can undertake
to survive the economic crisis and become globally competitive.
The project will meet World Bank Group environmental, health, and safety
policies and guidelines and host country requirements.
The mission of IFC, part of the World Bank Group, is to promote private
sector investment in developing countries, which will reduce poverty and
improve people's lives. IFC finances private sector investments in the
developing world, mobilizes capital in the international financial markets,
and provides technical assistance and advice to governments and businesses.