New Delhi, India, April 26, 2007 —
IFC, the private sector arm of the World Bank Group, will invest up to $20 million in Kanoria Chemicals and Industries Limited, to help the company expand the capacity of its caustic soda plant in Uttar Pradesh in India. The expansion of the Renukoot plant’s capacity from 90,000 to 130,000 tons per year by March 2008 will be based on more efficient, environmentally-friendly membrane cell technology, which consumes less energy per ton of output.
Kanoria will also expand the capacity of its downstream chlorine derivative production units, which will help improve the company’s margins. By providing long-term funding to Kanoria, IFC is addressing a midsize player’s critical need among 31 chlor-alkali producers in India. The loan will equip the company to grow dynamically and acquire economies of scale in a competitive and cyclical capital-intensive industry.
The Indian chemical industry, valued at about $30 billion in 2005, is projected to grow to about $60 billion by 2010. The industry accounts for nearly 13 percent of India’s exports. With 6000 players in agrochemicals, chlor-alkali, fertilizers, man-made fibers, paints, and petrochemicals, today, the highly-fragmented industry is attracting global players and creating new challenges.
“With IFC’s support, we hope to improve our efficiency and competitiveness,” explained R.V. Kanoria, Chairman and Managing Director of Kanoria Chemicals. “Associating with IFC will also enable us to leverage its global knowledge and expertise, and continue to adopt environmentally-friendly technologies and processes,” he added.
Lance Crist, Manager of IFC’s Chemicals Division, said, “Working with Indian companies to restructure and expand their businesses to become globally competitive is a key component of IFC’s strategy in the region. With this investment, IFC will help expand the capacity of caustic soda in an environmentally-friendly manner in Uttar Pradesh, one of the poorest regions of the country.”
IFC, the private sector arm of the World Bank Group, promotes open and competitive markets in developing countries. IFC supports sustainable private sector companies and other partners in generating productive jobs and delivering basic services, so that people have opportunities to escape poverty and improve their lives. Through FY06, IFC Financial Products have committed more than $56 billion in funding for private sector investments and mobilized an additional $25 billion in syndications for 3,531 companies in 140 developing countries. IFC Advisory Services and donor partners have provided more than $1 billion in program support to build small enterprises, to accelerate private participation in infrastructure, to improve the business enabling environment, to increase access to finance, and to strengthen environmental and social sustainability. For more information, please visit
IFC in India
In India, IFC currently holds a portfolio of $1.3 billion (as of June 2006), its fourth-largest country exposure. IFC’s cumulative commitment to Indian projects since 1956 amounts to $3.3 billion. IFC focuses on supporting the private sector-led development through direct investment and advisory services that promote growth and competitiveness in India. In FY06, IFC committed over $400 million in new investments in India.
Infrastructure is central to IFC's strategy in South Asia. In recent years, IFC has supported manufacturing companies aspiring to global competitiveness. IFC also supports innovation in financial services, including expansion of consumer and housing finance for lower-income groups. IFC provides advisory services and equity finance to microfinance institutions that provide loans to farmers and small nonfarm enterprises in rural areas. IFC is helping companies overcome the limited availability of long-term financing by using its strong credit rating and financial-structuring expertise to encourage domestic investors to buy longer-term commercial paper. IFC has also focused on the innovative application of technology by backing IT companies whose products offer potential for important contributions to economic development.