* IFC’s Post-Financial Crisis Support of Turkey Nears $350 Million
Washington D.C., June 17, 2002
—The International Finance Corporation (IFC), the private sector development arm of the World Bank, will invest US$10 million in a leading Turkish tiles manufacturer to help the company overcome its working capital shortages, improve production efficiency, and boost exports. The investment in tile manufacturer Eczazibasi Karo Seramik A.S (EKS) is part of IFC’s ongoing support for Turkey’s private sector in the wake of last year’s financial crisis.
“The investment in EKS, a well-managed company and key employer, reflects our continued commitment to supporting key private sector companies as they recover from the financial crisis,” said Khosrow Zamani, IFC’s Director for Southern Europe and Central Asia. “A vibrant Turkish private sector that creates jobs and unleashes the full potential of the Turkish people is a critical factor in the country’s economic recovery. We are continually looking for strategic investments that will boost Turkey’s private sector,” he added.
EKS, a key employer located in the industrial cities of Bozoyuk and Tuzla, has been impacted by the domestic recession. “Manufacturing companies like EKS need access to long-term finance to help them offset the fall in the domestic market by increasing exports,” said Sujata Lamba, IFC’s Country Manager for Turkey. “By reinforcing the financial structure of EKS — liberating them from short-term debt worries — we are supporting their drive to become more efficient and boost exports. The IFC investment, which is part of a $25 million project to modernize the company, will also help the company to restructure its balance sheet and improve its liquidity,” Ms. Lamba added.
EKS is owned by Eczacibasi Holding, which owns 98 percent of the shares of the company. Eczacibasi Holding belongs to the Eczacibasi Group, one of the leading business groups in Turkey with 39 companies and more than 7000 employees, mainly in pharmaceuticals, consumer products, and building materials.
Since April 2001, IFC has invested nearly $350 million in a wide range of companies and financial institutions to help weather the current economic difficulties. The investments have been aimed at boosting export revenues, improving efficiency, expanding production, and replenishing working capital.
“Turkey’s private sector has shown considerable resilience in the past few months,” Mr. Zamani said, “We are prepared to grow our role in supporting Turkish companies as the country embarks on a growth plan,” he added.
Turkey is an important country for IFC, the fourth largest exposure accounting for about 4.5 percent of IFC’s global portfolio. IFC’s held portfolio, including amounts mobilized from commercial banks, is close to $1 billion.
IFC’s mission is to promote sustainable private sector investment in developing countries, helping to 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. Since its founding in 1956 through the close of the last fiscal year on June 30, 2001, IFC committed more than $31 billion of its own funds and arranged $20 billion in syndications for 2,636 companies in 140 developing countries. IFC’s committed portfolio at the end of FY01 was $14.3 billion.
