WASHINGTON, D.C., Oct. 31 -- The International Finance Corporation (IFC) today signed an agreement to provide up to US$20.6 million for an expansion project being undertaken by General Tyre and Rubber Co. of Pakistan Limited, the country's premier automobile tire producer. IFC's financing consists of a loan of US$14.7 million and an equity investment of about US$2.9 million. In addition, IFC will provide a standby loan of up to US$3 million. The US$41 million expansion program will make General Tyre and Rubber Co. the first producer of steel-belted radial tires in Pakistan, where demand for the product is growing. The company will increase its car tire production capacity from 800,000 to 1,300,000 units annually, and expand its production of passenger car, light truck, truck, tractor, and bus tires. The project will be implemented with the support of Continental AG of Germany and its affiliate, General Tire Inc. of the United States. "IFC is pleased to be associated with this important value-added segment of
Pakistan's automotive industry and we look forward to continue working with business circles and the Government of Pakistan in developing the potential of the automotive sector," said Mr. Jemal-ud-din Kassum, IFC's Vice President, Operations, when he signed the agreement with Lt. Gen. (Retd.) Habibullah Khan Khattak, Chairman of General Tyre and Rubber Co. of Pakistan in Karachi. Mr. Kassum added: "The transfer of technology and skills and access to research and development are key elements for success and we are therefore very happy to have played a role in enhancing the ties between the General Tyre and Rubber Co. of Pakistan and Continental AG." General Tyre and Rubber Co. of Pakistan is largely owned by Pakistani investors and is listed on the Karachi Stock Exchange. Continental AG has 10 percent shareholding in the company. 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 countries.
