Bangkok, Thailand, October 29, 1999 —
The International Finance Corporation will help a leading manufacturer of ceramic floor and wall tiles in the Philippines to undertake a US$30 million financial and operational restructuring by investing up to US$15 million in Mariwasa Manufacturing, Inc., and its subsidiary, together known as MMI.
MMI—with consolidated annual sales of $36 million and total assets of $115 million—supplies about 40 percent of the ceramic tile market in the Philippines with its well-established "Mariwasa" brand. In 1997, it expanded production capacity by establishing a state-of-the-art plant in a Batangas City industrial zone to improve efficiency and satisfy anticipated increases in domestic demand. The unavailability of long-term financing and significant drop in demand for building materials following onset of the Asian crisis prevented MMI from completing its planned expansion and modernization.
The major MMI shareholders are the Co Seteng family and the Siam Cement Group of Thailand. The Co Seteng family has 33 years of experience in the ceramic tile business in the Philippines. The Siam Cement Group is Thailand's largest ceramic tile producer.
IFC's financing consists of a senior loan of the yen equivalent of $12 million and a subordinated loan of $3 million. IFC also assisted MMI in developing a restructuring plan to reduce the company's debt burden, increase the average tenor of borrowings, and concentrate production in the most efficient plant. As a result of the restructuring, MMI expects to be in a much stronger financial position.
IFC Vice President Mr. Jemal-ud-din Kassum said the restructuring is a good example of cooperation between leading Thai and Philippine companies that will assist the regional building materials industry to recover through consolidation and increased operating efficiency . The project is expected to provide a model of restructuring that similar companies can undertake to survive the economic crisis and become globally competitive.
The project will meet World Bank Group environmental, health, and safety policies and guidelines and host country requirements.
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.