WASHINGTON, D.C., Aug. 8 -- The International
Finance Corporation (IFC) has signed financing agreements with two Brazilian
companies -- Latas de Aluminio S.A. (Latasa) and Companhia Cervejaria Brahma
-- that are expanding their operations due to the dynamic growth of the
beverage industry in Brazil.
IFC has also approved two related cross-border investments by these companies.
Latasa will invest in a new plant in Chile, while Brahma is expanding into
"Growing, more open economies and rising demand in Latin America are
prompting companies to modernize and expand their operations to maintain
their competitiveness," according to Mr. Helmut Paul, Director of
IFC's Latin America and the Caribbean Department. "IFC is actively
supporting this process, as well as another important trend -- cross-border
investments within the region," he added.
Latasa is carrying out a US$107.7 million investment program in response
to the growing demand for aluminum cans, which are valued for their convenience
by both bottlers and consumers and are also 100 percent recyclable. The
company has installed an additional can body production line at its plant
in Pouso Alegre, Minas Gerais and is expanding its can lid production at
this plant. It also has constructed a new can body plant in Santa Cruz,
Rio de Janeiro.
IFC is lending Latasa US$26 million, of which US$21 million will be provided
by IFC from its own funds and US$5 million will come from three banks participating
in an IFC syndicated loan -- Banque Européene pour l'Amerique Latine S.A.,
Deutsch-Südamerikanische AG, and ING Bank.
IFC has also approved an investment to assist Latasa's expansion into the
Chilean market. Reynolds Chile S.A., a majority-owned subsidiary of Latasa,
is constructing a new US$43.7 million can plant near Santiago. IFC is lending
the company US$8.5 million and is making an equity investment of US$2.5
million in the project.
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Brahma is undertaking a US$575.8 million two-year expansion and modernization
program to meet the rising demand for beer and soft drinks in Brazil. The
company will construct two new breweries, allowing it to close three obsolete
plants, and upgrade seven existing plants.
IFC is providing two loans totaling US$35 million for its own account.
IFC has also arranged a syndicated loan with 17 international commercial
banks for a total of US$123 million, more than double the original target
of US$60 million.
In addition, IFC has approved financing in support of Brahma's first foreign
direct investment, a joint venture brewery in Argentina. CCBA S.A., a majority-owned
subsidiary of Brahma, will construct and operate the new brewery, which
will have an initial capacity of 1.5 million hectoliters, in a project
with an estimated total cost of US$108 million.
The project will enable the company to build on its market share in Argentina,
where it has been exporting for the past eight years and where demand for
beer and soft drinks has also shown strong growth.
IFC is providing two loans totaling US$18.5 million for its own account
and will arrange a syndicated loan of up to US$25 million with international
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