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IFC INVESTS US$41 MILLION IN PAKISTAN'S TEXTILE SECTOR


L. Joseph
Phone: (202) 473-7700
Fax: (202) 676-0365
E-mail: LJOSEPH@Worldbank.org


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 countries.