Washington, D.C., November 26, 2007
— IFC, a member of the World Bank Group, will provide a financing package to Soktas, a textile manufacturer in Turkey, and its subsidiary Soktas India to help the company upgrade its capital equipment and shift to higher value-added products, increasing their competitiveness in export markets.
The $45.8 million package will include long-term loans to Soktas Turkey and Soktas India, in addition to an equity investment in Soktas India that represents about an 11 percent stake in the company.
The financing package will enable the company to establish a 14 million meter greenfield manufacturing plant
in India for producing yarn-dyed shirting fabric to serve the expanding markets in India and Southeast Asia.
IFC’s investment will also help the company carry out its strategic investment initiatives, creating new jobs in India. Soktas will use state-of-the-art technology at the new plant in India, strengthen the textile industry, and help build skills of the local work force, with benefits for the broader economy. While Soktas will maintain the same capacity in Turkey, the group’s total capacity after project implementation is expected to be 28 million meters a year.
Vice Chairmen Muharrem Kayhan and Hilmi Kayhan of Soktas were both present at the signing ceremony. “The loan will allow us to become more competitive and enhance our ability to serve our clients better,” said Muharrem Kayhan. “We are very pleased with our partnership with IFC on this project and look forward to working together on future projects,” added Hilmi Kayhan.
Dimitris Tsitsiragos, IFC Director for Global Manufacturing and Services, said, “This project fits well with IFC’s strategic priority of supporting investments among two important emerging economies and expanding the capacity of manufacturing companies to become cost competitive and contribute to sustainable private sector growth.”
Shahbaz Mavaddat, IFC Director for Southern Europe and Central Asia, said, “We are happy to team up with Soktas. The investment in India will help reduce the group’s overall manufacturing cost and improve its access to other markets. This is important after the elimination of import quotas
.
IFC is also very pleased to support the cross fertilization of technology between Turkey and India and is committed to providing long-term funding to support the expansion of internationally competitive Turkish companies.”
Paolo M. Martelli, IFC Regional Director for South Asia, said, "Apart from services sector companies, manufacturers from other emerging markets are investing increasingly in projects in India. IFC's strategy to support such investments has helped create more efficient and profitable globally competitive companies in the markets we serve."
About IFC
IFC, a member of the World Bank Group, fosters sustainable economic growth in developing countries by financing private sector investment, mobilizing private capital in local and international financial markets, and providing advisory and risk mitigation services to businesses and governments. IFC’s vision is that poor people have the opportunity to escape poverty and improve their lives. In FY07, IFC committed $8.2 billion and mobilized an additional $3.9 billion through loan participations and structured finance for 299 investments in 69 developing countries. IFC also provided advisory services in 97 countries. For more information, visit
www.ifc.org
.
About Soktas
Soktas was established in 1971 in western Turkey, in the town of Soke, about 80 kilometers south of Izmir. The company started as a cotton yarn spinner and evolved to become one of Europe’s top three manufacturers of yarn-dyed shirting fabric. Today, it operates a fully integrated textile plant, with an annual capacity of about 15 million meters. Soktas Turkey entered the dairy farm business in 2006 to diversify its activities and reduce its dependence on the textile sector.
