WASHINGTON, D.C., May 28, 1999 --- The
International Finance Corporation has signed an agreement to invest up
to US$25 million in Moser Baer India Limited (MBIL), the largest manufacturer
and exporter of floppy disks in India.
IFC's financing consists of an equity investment of up to $8 million and
a loan of up to Euro16.75 million ($17 million) for IFC's own account.
The $91 million project will allow MBIL to set up a global-sized export
oriented facility with an annual production of 95 million compact disk
recordables (CD-Rs) – CDs on which data and music can be easily recorded.
In 1997, IFC invested to help MBIL expand its floppy disk capacity seven-fold.
With the new investment, IFC's total exposure in the company would be about
The demand for optical data storage media is growing rapidly with increasing
multimedia applications and the need for higher data storage capacity and
greater operational reliability. CD-R has become one of the most
popular of the various optical data storage media products introduced in
the market in recent years and has achieved explosive growth. Since the
manufacture of CD-Rs is labor intensive and high-tech, the project would
benefit from low labor and overhead costs in India and economies of scale
resulting from a global-sized facility. Its competitive advantages are
a large, existing marketing network, distribution channels and customers,
and experience in disk technology. As in the case of floppy disks, MBIL
is expected to become one of the lowest cost CD-R manufacturers in the
Rashad Kaldany, IFC Director for South & Southeast Asia, said that
the project -- the first of its kind in South Asia -- would put India on
the world map for the manufacture of high quality optical media and make
the country an important source for such high-tech products. The project
would also introduce new technology and sustain the growth and development
of the technology sector, a priority of the Indian Government.
Mr. Deepak Puri, CEO of MBIL, said that IFC's involvement -- particularly
its large equity investment -- would help the company achieve high growth
objectives and become a major global player in the data storage industry.
The mission of IFC, part of the World Bank Group, is to promote private
sector investment in developing countries which will reduce poverty and
improve people's lives. IFC finances private sector investments in the
developing world, mobilizes capital in the international financial markets,
and provides technical assistance and advice to governments and businesses.