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WASHINGTON, D.C., July, 1, 2004 —
The International Finance Corporation, the private sector arm of the World Bank Group, today announced two separate agreements to invest a total of $27 million in Ras Al Khaimah Ceramics of the United Arab Emirates (RAK-UAE) to help finance expansion projects in Iran and India. RAK Ceramics is one of the largest and most successful ceramic tiles and sanitary ware manufacturers in the world. In February 2002, IFC provided $12 million to RAK-UAE’s subsidiary in Bangladesh for setting up a sanitary ware production facility and expanding its tiles line.
IFC’s investment will help facilitate foreign direct investments (FDI) in the manufacturing sectors in Iran and India. Each expansion project will have state-of-the-art technology and the ability to produce high-margin, high-quality, affordable tiles and sanitary ware, helping import substitution in both the countries. In addition, the Iranian and Indian subsidiaries of RAK-UAE will benefit from access to low-cost raw materials, labor and utilities, bolstering the international competitiveness of their operations.
IFC support for the projects will enable the transfer of the latest production technology, technical and managerial know-how from RAK-UAE to Iran and India, with spillover benefits for the wider economy in both countries. Concurrently, the expansion projects will create more than 500 jobs in both Iran and India, with added employment generation likely to come from upstream and downstream linkages to the projects.
Dimitris Tsitsiragos, IFC Director for South Asia, noted, “IFC’s investment with RAK-UAE in India will promote the flow of South to South foreign direct investment in the manufacturing sector. India will receive an additional $45 million in FDI as a result of this project. RAK Ceramics India will also promote the use of locally available raw materials, and help spur the development of new downstream industries, such as, clay mining and transportation, in the country.”
Sami Haddad, IFC Director for Middle-East and North Africa, remarked, “IFC’s investment fits with its long-term strategy for Iran of helping build a strong manufacturing base to reinforce growth in the non-oil sector. It will also help attract fixed private investment inflows into Iran.”
The mission of IFC (
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, helps clients improve social and environmental sustainability, and provides technical assistance and advice to governments and businesses. From its founding in 1956 through FY03, IFC has committed more than $37 billion of its own funds and arranged $22 billion in syndications for 2,990 companies in 140 developing countries. IFC’s worldwide committed portfolio as of FY03 was $16.8 billion for its own account and $6.6 billion held for participants in loan syndications.
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