WASHINGTON, D.C., Dec. 19 -- The International Finance Corporation (IFC)
has signed financing agreements with two Argentine agribusiness companies
-- Grunbaum, Rico y Daucourt S.A. (GRD), a leather producer, and Malteria
Pampa S.A., a malt producer -- to assist in their expansion and modernization.
IFC is providing two loans totaling US$10 million for its own account and
will arrange a US$5 million syndicated loan for GRD, which is carrying
out a US$21 million investment program to expand its sales of higher value-added
leather. The project will help strengthen GRD's competitive position in
the leather furniture upholstery and automotive upholstery markets, where
it is a world-class producer, exporting 95 percent of its production. The
company recently signed an agreement to become an official supplier for
BMW's operations in South Africa, which will require GRD to obtain ISO
9000 certification as well as undertake several specific investments and
upgrades. The project also features a number of environmental improvements.
An aspirator system will be installed to control dust emissions, while
the liquid effluent treatment facility will be upgraded to ensure that
the plant outflow quality complies with local standards and World Bank
guidelines. Malteria Pampa's US$14 million investment program will expand
production capacity and improve product quality controls. IFC is providing
two loans totaling US$7 million for its own account. The company exports
over 80 percent of its production, primarily to Brazil. Because malting
barley cultivation requires close collaboration between farmers and malt
producers, Malteria Pampa will expand its working relationships with farmers
in Buenos Aires, Pampa, Cordoba, and Sante Fe provinces, providing seeds
and technical assistance and increasing its purchases. The project will
therefore contribute to farm incomes throughout Argentina.
"These projects, by strengthening the competitiveness of important
Argentine export industries, will both have an important development impact,"
according to Mr. Karl Voltaire, Director of IFC's Agribusiness Department.
"They will also create jobs and enhance the firms' ability to access
the international capital markets on their own in the future," he
added. Agribusiness is an important sector for IFC in Argentina. In fiscal
1995, the Corporation invested US$172 million in four agribusiness projects
in the country with a total project cost of US$369.2 million. IFC is a
member of the World Bank Group and is the leading multilateral source of
equity and loan financing for private sector projects in developing countries.