Washington D.C. June 26, 2002
—The International Finance Corporation, the private sector development arm of the World Bank, will provide groundbreaking support to Syria’s private sector with a US$13.2 million project finance loan to help build a new company that will provide raw materials for detergents manufacturers. The IFC loan – part of a $38 million financing package to create United Joint Stock Company for Petrochemical Industries – marks the first time a project finance transaction will support the creation of a new company in Syria, establishing an important milestone in Syria’s ongoing private sector liberalization.
United Joint Stock Company for Petrochemical Industries (UCPI) will be sponsored by the well-regarded Syrian business family of Mr. Ahmad Daaboul and his sons, who will be the majority partners, and Mr. Suleiman Al-Rajhi, a prominent Saudi Arabian businessman who will become the minority partner.
The project consists of the construction and operation of a 30,000 mt/year linear alkyl benzene (LAB) plant and the associated infrastructure in a location south of Damascus. LAB is the major feedstock required to produce all kinds of detergents, from liquid soap to laundry powder.
The IFC investment marks the Corporation’s largest investment in Syria and reflects its commitment to supporting the private sector as the country seeks to create a more investor-friendly climate. The project is IFC’s first debt financing project in Syria.
Rashad R. Kaldany, Director of IFC’s Oil, Gas, and Chemicals Department, said: “UCPI will help to narrow the demand/supply imbalance in Middle East’s LAB market and will allow regional detergent producers to procure their LAB needs in a cheaper and more timely fashion.”
Currently, Ahmad Daaboul & Sons Company for Detergent (ADD), the backbone of the Daaboul family’s businesses, relies on imported LAB for its production line. ADD will consume one-third of the project’s output with the remainder going to local and regional detergent manufacturers.
Sami Haddad, IFC’s Director for Middle East and North Africa, said: “This project supports Syria’s efforts to open its economy and create a more investor-friendly climate. It also demonstrates how IFC can assist Syria’s private sector development by leveraging a local businessman’s acumen with our international project finance experience.”
ADD is managed and wholly-owned by Mr. Daaboul and his family. Since its modest beginnings in 1974, ADD has developed into the leading Syrian detergents producer, offering laundry powders, dishwashing paste, and cleaning and disinfecting liquids. Roughly one-third of the detergent production is exported to other Arab countries, with small amounts going to Eastern Europe.
“With help from the IFC, we have improved our environmental standards, quality control, accounting procedures, and productivity,” said Ahmad Daaboul, Chairman of UCPI. “With these internationally recognized standards, we are now poised to grow our business further. We hope that this project will encourage other international investments in Syria and the growth of more industrial enterprises,” Mr. Daaboul added.
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.
