WASHINGTON, D.C., November 23, 1998 — The International Finance Corporation has joined with an Indonesian and a Turkish company to invest in Indorama Iplik, a new spun blended yarn plant in Turkey that will introduce the most modern technology to the Turkish textile spinning industry, encourage innovation, and introduce "just-in-time" delivery standards.
IFC signed an agreement to provide a loan of US$10 million (equivalent) and an equity investment of $660,000, representing about 10 percent of the share capital of Indorama Iplik. Indorama Iplik is a joint venture between the Indorama Group of Indonesia (59 percent) and the Ersa-Baler Group of Turkey (31 percent) .
Installation of a $30.6 million spun blended yarn plant with about 31,250 ring spindles will allow Indorama Iplik to meet increasing demand for polyester blended yarns in Turkey. Turkey traditionally produced cotton but has had to rely on imports to meet the increasing demand for polyester spun blended yarns in the last five years.
The project, at Corlu about 120 km from Istanbul, will have annual production of 10,350 metric tons of polyester/viscose and pure polyester yarns, making Turkey's private, small and medium-sized, textile industry more competitive by maximizing operating efficiency standards and reducing waste. There should also be multiplier effects on employment and foreign exchange generation.
Indorama Synthetics, the flagship company of the Indorama Group, is a longstanding polyester and blended yarn manufacturer in Indonesia and Southeast Asia. Indorama is a competitive player in the international markets, with almost 50 percent of its revenues derived from the quality-conscious European markets. The project will help an Indonesian sponsor to expand and diversify its production base and apply its two decades of technical skills and international marketing experience in Turkey.
Ersa-Baler Group of Turkey, which markets textile yarns and fabrics, was formed in 1996 by the merger of two companies active in the textile field -- Baler Tekstil and Ersa Kumascilik. Since the merger, the product range includes textile yarns, fibers, and polyester and viscose fabrics as well as imports from the Far East, Russia, Egypt, and Romania.
IFC, part of the World Bank Group, fosters economic growth in the developing world by financing private sector investments, mobilizing capital in the international financial markets, and providing technical assistance and advice to governments and businesses.
