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IFC Invests $48 Million In The Dominican Republic’s Cement Sector


In Washington, DC:
Adriana Gomez

Phone: (202) 458 5204

Email:
agomez@ifc.org


Washington, D.C., October 14, 2003. – The International Finance Corporation (IFC), the private sector arm of the World Bank Group, will provide $48 million to Domicem, S.A. to construct and operate a greenfield cement plant in the Dominican Republic.  This is the first greenfield investment in the country’s cement sector since 1976.  

The investment project, an integrated, dry-process cement plant with 900,000 tons per year of capacity, is estimated to cost $96 million.  IFC’s investment consists of a $24 million A loan for IFC’s own account and a $24 million syndicated  B loan for the account of two international financial institutions, the International Finance Participation Trust of Canada and SANPAOLO IMI S.p.A. of Italy.
The construction of this new plant is jointly sponsored by Colacem, S.P.A., Italy’s third-largest cement group, with a 51 percent participation (49 percent directly and 2 percent indirectly by SIMEST, a public merchant bank and subsidiary of the Italian government that supports Italian investments abroad), and by a group of well-established local investors with long-standing experience in the Dominican Republic’s cement industry.


By supplying its own clinker needs domestically through this new operation, Domicem is expected to help improve the productivity and competitiveness of the country’s cement sector.
 
Bernard Pasquier, director of IFC’s Latin America and Caribbean Department, remarked, “IFC is pleased to support Colacem’s first investment in Latin America.  This financing of Domicem fits well with IFC's strategy to foster the development of a sound market economy in the Dominican Republic, including encouraging private-sector participation in infrastructure development, mobilizing long-term financing, and promoting foreign direct investment.”


Richard Ranken, director of IFC’s Global Manufacturing and Services Department, noted, “We hope the cement sector in the Dominican Republic will benefit from Colacem’s excellent track record, and well as its focus on sustainable environmental and social development and effective collaboration with committed local partners.”


Carlo Colaiacovo, Colacem’s managing director, expressed satisfaction with the positive outcome of this first agreement with IFC: “Our relationship with IFC has given us a deep appreciation for the competence, skills, and professionalism of the team who helped attain an important goal.  IFC’s role, along with SIMEST’s, has been critical to help our group invest in the Dominican Republic, thus supporting the Colacem’s strategy to position itself as a global player in the international markets.”  


Pasquale Colaiacovo, Domicem’s chairman, stressed the investment’s importance and praised the stable relationship that the local partners have guaranteed in what he described as a reciprocal and continuous exchange of expertise. He remarked, “The Dominican Republic is a wonderful country that deserves high-quality investments—a  land in which one can perceive the will to increase productivity to accompany development of society as a whole.”
       
 
The mission of IFC is to promote sustainable private sector investment in developing countries, helping to reduce poverty and improve people's lives. IFC finances private sector investments in the developing world, mobilizes capital in the international financial markets, helps clients improve social and environmental sustainability, and provides technical assistance and advice to governments and businesses. From its founding in 1956 through FY03, IFC has committed more than $37 billion of its own funds and arranged $22 billion in syndications for 2,990 companies in 140 developing countries. IFC's worldwide committed portfolio as of FY02 was $16.7 billion for its own account and $6.6 billion held for participants in loan syndications.