WASHINGTON, D.C., Mar. 6—The International Finance Corporation (IFC) has approved a loan of up to US$25 million to Owens-Corning (India) Private Limited to build and operate a US$102 million plant that will manufacture glass fibre reinforcements at Taloja, Maharashtra, 40 miles from Mumbai.
The plant will have the capacity to produce 30,000 tonnes per year of glass fibre products used in the composites industry. Composites are fabricated materials made of two or more components such as plastic resin and glass fibre. They are used to replace traditional materials like aluminium, wood and steel. Composites are found in more than 50,000 products ranging from computers, automobiles, telecommunications and pipes to boats, appliances, snow skis and aircraft. Until 1991, the composites industry in India was reserved for small- and medium-scale enterprises only. Now that such constraints have been removed, this sector offers a huge potential for growth.
The Maharashtra plant is expected to produce the lowest cost composites in the world because of its size, state-of-the-art technology and abundant availability of the necessary skills and raw materials. Three-quarters of the plant’s production will be exported under a contractual arrangement with Owens Corning’s global marketing organization and the remainder will be sold in the domestic Indian market, which is likely to grow rapidly.
“The project will help industries with major export and job-creation potential, such as automobiles, telecommunications and appliances, to cut costs and make quality enhancing material substitutions as easily as their international competitors,” said Geoffrey Hawkins of IFC’s South Asia Regional Mission in New Delhi, India. “It will also demonstrate the viability of well-established material substitutions to other potential clients.”
Owens-Corning (India) Private Limited is a joint venture between Owens Corning of Toledo, Ohio, the world’s largest manufacturer of glass fibres, and Mahindra & Mahindra Limited, India’s largest manufacturer of utility vehicles and tractors. Owens Corning will be responsible for the management of the plant.
To date, IFC has made 174 investments in India totalling US$1.96 billion, of which US$303 million was in the form of loan syndications. IFC’s held portfolio at this time is US$847 million, including US$188 million of equity and quasi-equity investments.
IFC, a member of the World Bank Group, is the largest multilateral source of equity and loan financing for private sector projects in developing countries.