* Investment expected to help create up
to 240 new jobs
Washington D.C., August 28, 2001─The International Finance Corporation,
the private sector arm of the World Bank Group, has signed an agreement
to invest US$10 million in Gunkol, a leading Turkish manufacturer and exporter
of cooking appliances. The IFC investment is intended to support
the medium-sized company’s expansion efforts, enhance manufacturing efficiency,
and raise export capacity.
Sujata Lamba, IFC’s Country Manager for Turkey, said IFC is pleased to
support a new client in Turkey, particularly since Gunkol is a medium-sized
company that normally has limited access to long-term financing. She
said the investment is highly export-oriented and will help create up to
240 new jobs both directly and indirectly through local suppliers. She
said the investment is in line with IFC’s current efforts to support medium-sized
Turkish companies with long-term finance and make them less dependent on
short-term debt, adding that the investment reflects IFC’s commitment
to comprehensive coverage of Turkey at a time when private sector support
is critically needed.
Gunkol, part of the Turkish Teba group, has exported its products to more
than 80 countries since the early 1980’s, but increased global competition
requires technology improvements and manufacturing cost reductions to remain
competitive. With these improvements to go along with new product
developments, Gunkol will be poised to benefit from the increasing international
demand for low-cost cooking appliances. The IFC investment will help
Gunkol raise the company’s cooking range manufacturing capacity from 360,000
units to 700,000 units.
The project is located in Izmir, Turkey’s third largest city. Izmir
is also the second largest port in Turkey with a free trade area for exports.
The investment will involve the relocation of an old plant to a new
location near Izmir airport within an industrial zone.
The total project cost is estimated at $24 million. IFC will provide
a US$10 million long-term credit at commercial rates to the company. The
rest of the investment will be met through the sponsor’s own equity.
Turkey is an important country for IFC, the fourth largest exposure accounting
for about 4.5% of IFC’s global portfolio. IFC’s held portfolio,
including amounts mobilized from commercial banks, is close to $1 billion.
IFC’s program for Turkey continues to be active with investments
in projects of about $400 million. This follows an international
syndication for a Turkish client in April 2001.
The mission of IFC, part of the World Bank group, is to promote sustainable
private sector investment in developing countries as a way to reduce poverty
and improve people’s lives. IFC finances private sector investments
in emerging markets, mobilizes capital in the international financial markets
and provides technical assistance and advice to governments and businesses.