HANOI, VIETNAM, Oct. 29--The International
Finance Corporation (IFC) today signed an agreement to provide US$14.5
million (Vietnamese Dong 160 billion) in loans to San Miguel Haiphong Glass
Company (SMHG) -- a private sector-led joint venture -- for a US$32 million
greenfield glass container manufacturing plant at Haiphong in northern
Present at the signing were Mr. Jannik Lindbaek, IFC's Executive Vice President,
Mr. Rolando J. Mesa, General Director of SMHG, and Mr. Thai Luong, Chairman
of Haiphong Glass Factory.
The project's sponsors include San Miguel Holdings and San Miguel Glass
Vietnam, both wholly-owned by the Philippines-based San Miguel Corporation
(SMC), one of the largest food and beverage manufacturers in Asia, which
has a 65 percent equity stake in SMHG. SMC also manufactures substantial
amounts of glass containers for its own use and sales to third parties.
The Vietnamese sponsor is Haiphong Glass Factory, a Vietnamese Government
entity, which owns the other 35 percent of SMHG and is phasing out the
production of low quality bottles from obsolete facilities.
"What is especially interesting about this project is that IFC is
not only promoting private sector activity in Vietnam, but is also assisting
intra-Asian investment by helping a Philippine company to broaden its geographic
base and expand its activities in the challenging environment of Vietnam,"
said Mr. Lindbaek.
The project will produce 38,000 tons per year of glass containers to be
sold to Vietnam's rapidly-growing beverage, packaged foods, and pharmaceutical
markets. It will provide high quality glass bottles to meet the specifications
of bottle users employing faster filling machines being introduced to meet
The total loan package of US$14.5 million is being provided on a limited-recourse
basis and without government-guaranteed repayment. It consists of a loan
for IFC's account of US$10 million and a syndicated loan of US$4.5 million
for the account of a participant.
This project is part of IFC's effort to structure transactions using limited
recourse financing in Vietnam. IFC is also providing advisory assistance
to the Government to help in the transition to a market economy.
IFC is a member of the World Bank Group and is the largest multilateral
source of equity and loan financing for private sector projects in developing