Announcement of IFC Invests Seven Million Three Thousand US Dollars in Indian Steel Project on August 27, 1981

IFC Press Release No. 82/5 Thursday, August 27, 1981 IFC Invests $7.3 million In Indian Steel Project The International Finance Corporation (IFC) is investing $7.3 million to help finance a $27 million program to expand the cold rolling capacity of Nagarjuna Steel Limited (NSL), India, and to establish two downstream units -- Nagarjuna Signode Limited and Nagarjuna Coated Tubes Limited. The program will increase NSL's capacity from 15,000 metric tons a year to 28,000 tons at a cost of approximately $9.5 million. Nagarjuna Signode, an $8.75 million venture with Signode Corporation of the United States as technical partner, will produce 12,000 tons of steel strappings a year. And Nagarjuna Coated Tubes, an $8.8 million project with Allied Tube and Conduit Corporation, U.S., providing technical assistance, will have a capa- city to produce 18,000 tons of zinc galvanized steel tubes a year. Indian institutional and individual investors are providing $2.45 million in equity for the program and $2.91 million will be raised through public share issues. Indian Financial Institutions, which is a group of public sector insti- tutions, are lending approximately $12.1 million. Signode Corporation is investing some $1 million in equity and the Government is providing $375,000 in grants. NSL cash generation of $1 million and the invest- ment by IFC, an international development organization that assists the private sectors of developing countries, complete the financial plan. The program will help NSL, an established cold rolled steel producer, to expand its operations, improve its competitive position and provide indian industry with important special steel products. The program will also benefit the economy by creating approximately 500 jobs, by generating estimated foreign exchange savings of $14 million a year, and by introducing advanced technology into the country. - 2 - The steel strappings to be produced will offer consumers substantial savings and the coated tubes will provide longer service at a lower cost relative to competing products now available in India and about a third of the project output will be exported to neighboring countries. Both new facilities will be built in the Medak District, Andhra Pradesh, where NSL is located and which is one of the lesser developed areas in India. [Any inquiries strictly relating to IFC's participation in this project should be directed to the IFC Information Office, 1818 H Street, N.W., Washington, D.C. 20433, Telephone (202 676-0394.]