Istanbul, Turkey, November 20, 2001
—The International Finance Corporation, the private sector arm of the World Bank Group, has signed an agreement to invest US$25 million in Assan Demir, a leading Turkish manufacturer and exporter of aluminum foil and coil products. The IFC investment will support Assan’s efforts to achieve greater speed and flexibility in its production cycle, improve margins and lower conversion costs, and ride out the current economic and financial crisis by focusing on export markets.
Khosrow Zamani, Director of IFC's Southern Europe and Central Asia Department, said that IFC’s investment in Assan Demir reflects the Corporation’s commitment to support the Turkish private sector. “It is critical for international financial institutions to continue to support viable private sector capital investment in Turkey at a time when capital inflows to the country have been greatly reduced,” Mr. Zamani said. “In the midst of economic contraction and depressed domestic demand, Assan Demir’s role as a strong exporter becomes increasingly important,” he added.
IFC’s Turkey Country Manager, Sujata Lamba, noted that the newly established IFC regional hub office in Istanbul was opened to assist local enterprises such as Assan Demir, which are important exporters and stable employers. “This loan will enhance Assan’s international competitiveness by reducing costs through the use of modern technologies and improved economies of scale,” Ms. Lamba said. She added that the investment is in line with IFC's current efforts to support Turkish companies with long-term finance and make them less dependent on short-term debt.
Assan Demir, one of the principal companies of the family-owned Kibar Group, was established in 1977 and is the Turkish industry leader in aluminum processing. It has an excellent reputation for quality, flexibility and customer service in the aluminum sheet and foil business and has consistently maintained a domestic market share of over 50% during the last several years.
IFC will provide Assan Demir a loan for its own account of up to US$25 million, marking the third IFC loan to the Company in seven years. In 1994, IFC provided the Company with its first loan of $15 million for the expansion of its foil production. In 1997, IFC also provided the Company a loan package of $25 million, including a loan of $15 million for its own account and total syndicated loans of $10 million for the account of participant banks (Banque et Caisse d’Epargne de l’Etat Luxembourg, and Woori, formerly Hanaro, formerly KMBC.) to finance Assan Demir’s capacity expansion.
Turkey is an important country for IFC, the fourth largest exposure accounting for about 4.5% of IFC's global portfolio. IFC's held portfolio, including amounts mobilized from commercial banks, is close to $1 billion. IFC's program for Turkey continues to be active with investments in projects of about $400 million.
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, IFC has 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.
