WASHINGTON, D.C., March 29, 1999 — An
International Finance Corporation loan will help Vulcabrás do Nordeste
S.A., a Brazilian shoe manufacturer, to move its manufacturing to the northeastern
state of Ceará, bringing jobs and economic development to one of the poorest
regions of Brazil.
The US$20 million loan provides long-term financing that will allow Vulcabrás
to take on competition from foreign makers of athletic shoes through an
investment program to raise productivity, lower costs, and improve the
quality of its products. Greater competitiveness will allow the company
to fill local demand and export its products, mainly to the Mercosur market.
The company will relocate its manufacturing facilities from São Paulo to
the northeast coast of Brazil, modernize facilities with new technology
and machinery, and establish warehousing and retail outlets to maximize
product distribution. With these improvements, Vulcabrás can produce and
distribute up to 7 million pairs of high quality athletic shoes, men's
leather shoes, and rubber/vinyl work boots, mainly for the local market.
Athletic shoes will be produced under license from Reebok, Adidas, Puma,
The project will generate some 1,600 jobs in the state of Ceará, helping
to reduce poverty in the northeastern states, said Karl Voltaire, IFC Director
of Latin America and the Caribbean. He said the project underlines the
importance of small firms, such as Vulcabrás, in contributing to Brazil's
The project is sponsored by the Grendene Group which has interests in shoe
manufacturing, furniture making and agribusiness.
IFC, part of the World Bank Group, fosters economic growth in the developing
world by financing private sector investments, mobilizing capital in the
international financial markets and providing technical assistance and
advice to governments and businesses.