Istanbul, Turkey, August 29, 2001—The International
Finance Corporation, the private sector arm of the World Bank Group, has
signed an agreement to invest Euro 14 million in İpek Kağıt, a leading
Turkish manufacturer and exporter of tissue paper products. The IFC investment
is intended to help the company ride out the current economic and financial
Khosrow Zamani, Director of IFC's Southern Europe and Central Asia Department,
said that IFC’s new investment in İpek Kağıt reflects IFC’s commitment
to the Turkish private sector. He noted that it is critical for international
financial institutions to continue to support viable private sector enterprises
in Turkey at a time when capital inflows to the country have been greatly
reduced, and the local banking sector embarks on a process of reform. In
the midst of economic contraction and depressed domestic demand, İpek
Kağıt’s role as a strong exporter becomes increasingly important, he
Sujata Lamba, IFC’s Turkey Country Manager, noted that IFC has opened
a regional hub office in Istanbul to assist local enterprises such as İpek
Kağıt, which are important exporters and stable employers. Ms. Lamba
added that this loan from IFC is expected to help İpek to substantially
increase its exports, while enhancing foreign exchange revenues for Turkey
by as much as $20 million a year. The investment will also strengthen
the company’s financial situation by making İpek Kağıt less dependent
on short-term debt, she said.
İpek Kağıt, part of the Eczacibasi group, was established in 1970 as
Turkey’s first large scale and modern tissue paper operation. İpek
Kağıt was the first to introduce facial tissues and paper kitchen towels
to the country. The company has demonstrated a strong commitment
to continuous reinvestment and technological improvement and is now the
quality leader in tissue paper products in Turkey. The company has
been able to export its products to Europe and the Middle East, due to
its competitive cost and high quality products. The company’s increasing
export activities will support foreign currency earnings, while reinforcing
a positive image for quality-based Turkish exports.
IFC will provide İpek Kağıt a loan for its own account of up to Euro
14 million. In 1998, to finance İpek Kağıt’s capacity expansion,
IFC also provided the company a loan package of $65 million, including
a loan of $33 million for its own account and total syndicated loans of
$33 million for the account of participant banks (Banque Nationale de Paris,
Société Générale, Leonia Bank, and Crédit Lyonnais S.A.).
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.
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.