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WASHINGTON, D.C., Dec. 19 -- The International Finance Corporation (IFC) has signed financing agreements with two Argentine agribusiness companies -- Grunbaum, Rico y Daucourt S.A. (GRD), a leather producer, and Malteria Pampa S.A., a malt producer -- to assist in their expansion and modernization. IFC is providing two loans totaling US$10 million for its own account and will arrange a US$5 million syndicated loan for GRD, which is carrying out a US$21 million investment program to expand its sales of higher value-added leather. The project will help strengthen GRD's competitive position in the leather furniture upholstery and automotive upholstery markets, where it is a world-class producer, exporting 95 percent of its production. The company recently signed an agreement to become an official supplier for BMW's operations in South Africa, which will require GRD to obtain ISO 9000 certification as well as undertake several specific investments and upgrades. The project also features a number of environmental improvements. An aspirator system will be installed to control dust emissions, while the liquid effluent treatment facility will be upgraded to ensure that the plant outflow quality complies with local standards and World Bank guidelines. Malteria Pampa's US$14 million investment program will expand production capacity and improve product quality controls. IFC is providing two loans totaling US$7 million for its own account. The company exports over 80 percent of its production, primarily to Brazil. Because malting barley cultivation requires close collaboration between farmers and malt producers, Malteria Pampa will expand its working relationships with farmers in Buenos Aires, Pampa, Cordoba, and Sante Fe provinces, providing seeds and technical assistance and increasing its purchases. The project will therefore contribute to farm incomes throughout Argentina.
"These projects, by strengthening the competitiveness of important Argentine export industries, will both have an important development impact," according to Mr. Karl Voltaire, Director of IFC's Agribusiness Department. "They will also create jobs and enhance the firms' ability to access the international capital markets on their own in the future," he added. Agribusiness is an important sector for IFC in Argentina. In fiscal 1995, the Corporation invested US$172 million in four agribusiness projects in the country with a total project cost of US$369.2 million. IFC is a member of the World Bank Group and is the leading multilateral source of equity and loan financing for private sector projects in developing countries.
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