Loan to help BOR Glass raise quality and safety of Russian autoglass
Washington D.C., Moscow, Russia, February 5, 2003—The International Finance Corporation (IFC) and the European Bank for Reconstruction and Development are each lending 25 million Euro to Bor Glassworks, Russia’s leading supplier of float glass for the building and auto industries. Bor Glassworks is located in Russia’s Nizhny Novgorod Oblast, 250 miles East of Moscow.
The eight-year loan will be used to finance the company’s capital expenditure program, including the repair and upgrade of one of Bor ’s two lines for float glass – a higher-quality type of glass than sheet glass – as well as the completion of a line that will produce laminated autoglass.
The laminated-glass line will allow Bor to produce green glass for the automotive industry, which will help raise Russian autoglass products to European standards and thus increase the industry’s export appeal. Other auto-glass plans include the installation of a new cutting and printing line in 2002 and a new furnace for making tempered flat glass in 2004.
“Bor Glassworks demonstrates world class production standards for Russia’s glass sector,” said Edward Nassim, IFC Director for Central and Eastern Europe. “The development of downstream, value added businesses is fundamental to the growth of Russian glass industry. IFC is keen to support its global clients in key markets such as Russia. The investment reflects our continued commitment to supporting Russia’s private sector and one of many we intend to support in the coming year.” Mr. Nassim concluded.
The investment will, among other benefits, enable Bor to satisfy Russian auto manufacturers’ demand for higher quality glass, as well as match the requirements of international carmakers now starting production in Russia, said Dragica Pilipovic-Chaffey, Director of the EBRD’s Russia Team.
The scarcity of high quality component suppliers in Russia has to date been a deterrent for international car manufacturers considering entry into the Russian market.
The restructuring of this former state-owned glassworks has been a success despite the effects of the 1998 Russian financial crisis. The new investment programme involving Bor’s foreign owner Glaverbel and its parent, Asahi Glass, should send an important signal to other multinational companies now considering the Russian market, Pilipovic-Chaffey added.
The modernization being financed by these IFC and EBRD loans will help reduce noxious gas emissions, eliminate the use of asbestos rollers in the manufacturing process and meet other environmental concerns.
The EBRD and the IFC, the private sector arm of the World Bank, have been minority shareholders in Bor since the end of 1997, when the two international financial institutions invested $15 million each.
Bor is controlled by by Europe’s second biggest flat glass manufacturer, Belgium’s Glaverbel SA, which is in turn owned by Asahi Glass Co. Ltd., the world’s largest producer.
The Bor glassworks are situated in the town of Bor opposite Nizhny Novgorod on Russia’s Volga River, 500 km east of Moscow.
IFC’s mission (
www.IFC.org
) 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, 2002, IFC committed more than $34 billion of its own funds and arranged $21 billion in syndications for 2,825 companies in 140 developing countries. IFC's committed portfolio at the end of FY02 was $15.1 billion for our own account and $6.5 billion held for participants in loan syndications.
