WASHINGTON, D.C., May 20 -- The International
Finance Corporation (IFC) signed an investment agreement in Karachi today
to provide a financing package of US$41 million to Crescent Industrial
Chemicals Limited to establish the first acrylic fiber plant in Pakistan.
The new fiber plant will have a substantial impact on the country's textile
sector, which accounts for about 60 percent of exports, by broadening the
product range and reducing reliance on domestic cotton crops. Increased
production will ensure that a wider variety of lower-cost apparel is made
available to domestic consumers. The plant will be located in a special
industrial zone to promote development in Balochistan Province, a comparatively
under-developed province of Pakistan.
"By helping to establish the first acrylic fiber plant in the country,
IFC is supporting Pakistan's effort to encourage investments and improve
competitiveness in this key sector," said Mr. André Hovaguimian, Director
in IFC's Central Asia, Middle East, and North Africa Department.
IFC's financing package will consist of a loan of US$15 for its own account,
a syndicated loan of US$21 million for the account of international banks
and financial institutions, and an equity investment of up to US$5 million.
The total cost of the project is US$106.4 million.
Crescent Industrial Chemicals Limited will be a joint venture company owned
by the Crescent Group, a leading business conglomerate in Pakistan, involved
in textiles, paper, engineering, banking, and leasing; Monsanto Company
of the U.S., one of the largest acrylic fiber producers in the world; and
Itochu Corporation of Japan, a large Japanese trading house dealing in
acrylic fiber. The main contractor for the plant is Zimmer AG of Germany,
an engineering firm specializing in fiber production.
Global Securities Limited, a leading brokerage and investment house in
Pakistan, conducted the financial advisory for the project. Global Securities
will also arrange underwriting for the public offering and equity placements.
IFC is a member of the World Bank Group and is the largest multilateral
source of equity and loan financing for private sector projects in developing