Istanbul, Turkey, November 20, 2001—The
International Finance Corporation, the private sector arm of the World
Bank Group, has signed an agreement to invest US$25 million in Assan Demir,
a leading Turkish manufacturer and exporter of aluminum foil and coil products.
The IFC investment will support Assan’s efforts to achieve greater
speed and flexibility in its production cycle, improve margins and lower
conversion costs, and ride out the current economic and financial crisis
by focusing on export markets.
Khosrow Zamani, Director of IFC's Southern Europe and Central Asia Department,
said that IFC’s investment in Assan Demir reflects the Corporation’s
commitment to support the Turkish private sector. “It is critical
for international financial institutions to continue to support viable
private sector capital investment in Turkey at a time when capital inflows
to the country have been greatly reduced,” Mr. Zamani said. “In
the midst of economic contraction and depressed domestic demand, Assan
Demir’s role as a strong exporter becomes increasingly important,” he
IFC’s Turkey Country Manager, Sujata Lamba, noted that the newly established
IFC regional hub office in Istanbul was opened to assist local enterprises
such as Assan Demir, which are important exporters and stable employers.
“This loan will enhance Assan’s international competitiveness by
reducing costs through the use of modern technologies and improved economies
of scale,” Ms. Lamba said. She added that the investment is in line
with IFC's current efforts to support Turkish companies with long-term
finance and make them less dependent on short-term debt.
Assan Demir, one of the principal companies of the family-owned Kibar Group,
was established in 1977 and is the Turkish industry leader in aluminum
processing. It has an excellent reputation for quality, flexibility
and customer service in the aluminum sheet and foil business and has consistently
maintained a domestic market share of over 50% during the last several
IFC will provide Assan Demir a loan for its own account of up to US$25
million, marking the third IFC loan to the Company in seven years. In
1994, IFC provided the Company with its first loan of $15 million for the
expansion of its foil production. In 1997, IFC also provided the
Company a loan package of $25 million, including a loan of $15 million
for its own account and total syndicated loans of $10 million for the account
of participant banks (Banque et Caisse d’Epargne de l’Etat Luxembourg,
and Woori, formerly Hanaro, formerly KMBC.) to finance Assan Demir’s capacity
Turkey is an important country for IFC, the fourth largest exposure accounting
for about 4.5% of IFC's global portfolio. IFC's held portfolio, including
amounts mobilized from commercial banks, is close to $1 billion. IFC's
program for Turkey continues to be active with investments in projects
of about $400 million.
IFC's mission 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, and provides technical
assistance and advice to governments and businesses. Since its founding
in 1956, IFC has committed more than $31 billion of its own funds and arranged
$20 billion in syndications for 2,636 companies in 140 developing countries.
IFC's committed portfolio at the end of FY01 was $14.3 billion.