Loan to help BOR Glass raise quality and
safety of Russian autoglass
Washington D.C., Moscow, Russia, February 5, 2003—The International Finance
Corporation (IFC) and the European Bank for Reconstruction and Development
are each lending 25 million Euro to Bor Glassworks, Russia’s leading supplier
of float glass for the building and auto industries. Bor Glassworks is
located in Russia’s Nizhny Novgorod Oblast, 250 miles East of Moscow.
The eight-year loan will be used to finance the company’s capital expenditure
program, including the repair and upgrade of one of Bor ’s two lines for
float glass – a higher-quality type of glass than sheet glass – as well
as the completion of a line that will produce laminated autoglass.
The laminated-glass line will allow Bor to produce green glass for the
automotive industry, which will help raise Russian autoglass products to
European standards and thus increase the industry’s export appeal. Other
auto-glass plans include the installation of a new cutting and printing
line in 2002 and a new furnace for making tempered flat glass in 2004.
“Bor Glassworks demonstrates world class production standards for Russia’s
glass sector,” said Edward Nassim, IFC Director for Central and Eastern
Europe. “The development of downstream, value added businesses is fundamental
to the growth of Russian glass industry. IFC is keen to support its global
clients in key markets such as Russia. The investment reflects our continued
commitment to supporting Russia’s private sector and one of many we intend
to support in the coming year.” Mr. Nassim concluded.
The investment will, among other benefits, enable Bor to satisfy Russian
auto manufacturers’ demand for higher quality glass, as well as match
the requirements of international carmakers now starting production in
Russia, said Dragica Pilipovic-Chaffey, Director of the EBRD’s Russia
The scarcity of high quality component suppliers in Russia has to date
been a deterrent for international car manufacturers considering entry
into the Russian market.
The restructuring of this former state-owned glassworks has been a success
despite the effects of the 1998 Russian financial crisis. The new investment
programme involving Bor’s foreign owner Glaverbel and its parent, Asahi
Glass, should send an important signal to other multinational companies
now considering the Russian market, Pilipovic-Chaffey added.
The modernization being financed by these IFC and EBRD loans will help
reduce noxious gas emissions, eliminate the use of asbestos rollers in
the manufacturing process and meet other environmental concerns.
The EBRD and the IFC, the private sector arm of the World Bank, have been
minority shareholders in Bor since the end of 1997, when the two international
financial institutions invested $15 million each.
Bor is controlled by by Europe’s second biggest flat glass manufacturer,
Belgium’s Glaverbel SA, which is in turn owned by Asahi Glass Co. Ltd.,
the world’s largest producer.
The Bor glassworks are situated in the town of Bor opposite Nizhny Novgorod
on Russia’s Volga River, 500 km east of Moscow.
IFC’s mission (www.IFC.org)
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, and provides technical assistance and advice to governments
and businesses. Since its founding in 1956 through the close of the last
fiscal year on June 30, 2002, IFC committed more than $34 billion of its
own funds and arranged $21 billion in syndications for 2,825 companies
in 140 developing countries. IFC's committed portfolio at the end of FY02
was $15.1 billion for our own account and $6.5 billion held for participants
in loan syndications.