WASHINGTON, D.C., May 28, 1999 --- The International Finance Corporation has signed an agreement to invest up to US$25 million in Moser Baer India Limited (MBIL), the largest manufacturer and exporter of floppy disks in India.
IFC's financing consists of an equity investment of up to $8 million and a loan of up to Euro16.75 million ($17 million) for IFC's own account. The $91 million project will allow MBIL to set up a global-sized export oriented facility with an annual production of 95 million compact disk recordables (CD-Rs) – CDs on which data and music can be easily recorded. In 1997, IFC invested to help MBIL expand its floppy disk capacity seven-fold. With the new investment, IFC's total exposure in the company would be about $31 million.
The demand for optical data storage media is growing rapidly with increasing multimedia applications and the need for higher data storage capacity and greater operational reliability. CD-R has become one of the most popular of the various optical data storage media products introduced in the market in recent years and has achieved explosive growth. Since the manufacture of CD-Rs is labor intensive and high-tech, the project would benefit from low labor and overhead costs in India and economies of scale resulting from a global-sized facility. Its competitive advantages are a large, existing marketing network, distribution channels and customers, and experience in disk technology. As in the case of floppy disks, MBIL is expected to become one of the lowest cost CD-R manufacturers in the world.
Rashad Kaldany, IFC Director for South & Southeast Asia, said that the project -- the first of its kind in South Asia -- would put India on the world map for the manufacture of high quality optical media and make the country an important source for such high-tech products. The project would also introduce new technology and sustain the growth and development of the technology sector, a priority of the Indian Government.
Mr. Deepak Puri, CEO of MBIL, said that IFC's involvement -- particularly its large equity investment -- would help the company achieve high growth objectives and become a major global player in the data storage industry.
The mission of IFC, part of the World Bank Group, is to promote private sector investment in developing countries which will reduce poverty and improve people's lives. IFC finances private sector investments in the developing world, mobilizes capital in the international financial markets, and provides technical assistance and advice to governments and businesses.
