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IFC APPROVES FINANCING FOR ARGENTINE DAIRY COMPANY


Mauricio Perea
(202) 473-7997


WASHINGTON, D.C., Oct. 24 -- The International Finance Corporation (IFC) has approved US$75 million in financing for Mastellone Hnos. S.A., the leading dairy company in Argentina. Mastellone is investing US$124.7 million to consolidate its leadership of the expanding and increasingly competitive dairy market. The company will increase and automate the production of yogurt, dessert, and spread cheese; modernize milk collection centers; introduce pasteurized milk production to some important provincial locations; and consolidate and expand its marketing network. IFC is providing a US$20 million loan for its own account and a US$20 million convertible debentures issue. IFC is also arranging a US$35 million loan to be syndicated with international commercial banks. Economic stability in Argentina, coupled with the removal of price controls in the dairy sector, has spurred considerable growth in the Argentine dairy market. At the same time, lower trade barriers have made it easier for foreign companies to penetrat
e the market. "This project reflects IFC's strategy of enhancing agribusiness firms' access to long-term finance in Latin America," according to Mr. Karl Voltaire, Director of IFC's Agribusiness Department. "Economic liberalization has brought more opportunities for these firms, but greater competition as well, particularly in the Southern Cone." IFC is a member of the World Bank Group and is the leading multilateral source of equity and loan finance for private sector projects in developing countries.