WASHINGTON, D.C., Dec. 5—Monday, November 25, the International Finance Corporation (IFC) signed a US$60 million investment agreement with Grupo Minsa, S.A. de C.V., the second largest corn flour producer in Mexico.
The financing will assist Minsa construct a new corn flour plant; modernize and expand its existing plants; upgrade the production facilities to World Bank Group environmental standards; and restructure part of the company’s short-term debt. Upon completion of the company’s investment program, Minsa is expected to have efficient, state-of-the-art production facilities and a strong financial position.
“IFC’s financing illustrates the Corporation’s support for Mexico’s continuing privatization program,” said Mr. Helmut Paul, Director of IFC’s Latin America Department. “By supporting Minsa, IFC is encouraging competition in an important industry. Assuming the tortilla market is eventually deregulated, IFC believes Mexican consumers are likely to see spill-over benefits such as competitive pricing, product innovation, and enhanced service.”
“MINSA has been growing at a fast pace since its start up in 1993. The IFC financial package gives the company the resources required to continue growing our share of the corn flour market. We are pleased with the transaction and look forward to a constructive relationship with IFC,” added Mr. Juan Gargallo, the Chief Executive Office of Minsa.
The financing package comprises a loan of US$50 million and an equity investment of US$10 million. The total project cost is estimated at US$80 million.
The agreement was signed at a ceremony hosted by IFC at the Corporation’s headquarters in Washington D.C. Present at the signing ceremony were Mr. Juan Gargallo, Chief Executive Officer of Minsa; Mr. Hubert Ehrli, Chief Financial Officer of Minsa; Mr. Helmut Paul, Director of IFC’s Latin America Department; and Mr. André Cracco, Manager in IFC’s Latin America Department.
Minsa, headquartered in Mexico City, has six plants throughout Mexico employing over 1,200 people. The company was privatized in October 1993.
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.
