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IFC SIGNS AGREEMENT TO STRENGTHEN CONSTRUCTION MATERIALS SECTOR IN THE BALTIC REGION


Amy Conran
(1-202) 473-9119


HELSINKI, Dec. 13 -- The International Finance Corporation (IFC) today signed an agreement to help establish Rudus Oy, a Finnish holding company that will invest in the construction materials sectors of Estonia, Latvia, Lithuania, and St. Petersburg. Rudus will make equity investments in small and medium sized companies producing ready mix concrete and concrete products such as pipes, paving stones, and aggregates. Rudus will also provide management expertise to these businesses, maintaining management control in acquired companies to ensure efficient production and high quality standards. Several of Rudus' investments will rehabilitate and privatize companies while improving their technology. Demand for Rudus' output is expected to increase as infrastructure is improved and housing construction is renewed in the Baltic region. In addition to IFC's investment of US$1.4 million in Rudus, the company will be 60 percent owned by Lohja Oy Finland, a subsidiary of Euroc AB, a Swedish-Finnish construction materials
company, and 20 percent owned by Finnfund, the Finnish Fund for Industrial Development Corporation. The total capitalization for Rudus will be US$7.24 million. IFC, a member of the World Bank Group, is the largest multilateral source of equity and loan financing for private sector projects in developing countries.