Announcement of IFC Investment in the Khartoum Spinning and Weaving Company Limited, Sudan on July 14, 1964

.INTERNATIONAL FINANCE CORPORATION 1818 H STREET, N.W., WASHINGTON 25, D. C. TELEPHONE: EXECUTIVE3-6360 IFC _Press Release No. 64/13 Subject: IFC investment in the For release AM newspapers Khartoum Spinning and Weaving Tuesday, July 14, 1964 Company Limited, Sudan The International Finance Corporation, an affilia.'te of the World Bank, has agreed to join w:i.th Sudanese and Japanese interests in providing lc:ui and share capital to the Khartoum Spinning and Weaving Company Limited (KSW), which Will operate an integrated cotton-textile mill in Khartoum. The total cost of erecting the mill and providing it with its initial working capital is estimated at LSd 2.1 million ( equivalent to $6 million)., IFC 1 s loan and share investment commitment amounts to $690,000 equivalent. This is IFC 's first investment in the Sudan. • Ha.ndelsfinanz AoG., Zurich, and Kuwait Investment Company (S.A.K.) are parti- cipating in IFC 's investment. The operation of the mill Will provide the Sudan with an important economic asset. By using locally grown cotton and by supplyin~ the market with cloth of a. kind which is presently imported in substantial amounts, the project will help 'both to diversify the economic activity of the country and to provide a saving in foreign exchange. The new mill in Khartoum is equipped with 20,000 spindles and 700 looms. One- shi~ production is due to begin in the near future and it is estimated that full three-shi~ production should be attained in 1965. At full operation, it is ex- pected that annual production will be somewhat over 20 million square yards, initially of a single quality of grey sheeting. The mill will use approximately 3,500 tons of Nuba mountain cotton per year • and employ about 900 persons a.t full production. The entire output will be sold  : 1 • ·,, ' I I to the Sudanese market. - 2 - Total annual ccnsumptio:1 of grey- sheetings in the Sudan is at present approximately 100 million square yards, and the Sudanese market requirements have been largely met by imports from eastern Europe, the Middle &st and South Asia. KSW has a total subscribed share capital of LSd 1.2 million, of 1vhich LSd 1,105,000 has been paid up. It includes payments of LSd 665,000 bJr a group of Suda.nese interests, LSd 120,000 by The Gosho Co. Ltd, of Japan {Gosho), LSd 60,000 by Geretco s.A. of SWitzerla.nd, and LSd 120,000 by IFC. ~1he owner- ship of KSW will be broadened by the sale of 14,ooo new shares to other private investors in the Sudan. • Loan capital is being made available to the company by IFC and Gosho. IFC is lending $247,000 and~ stg. 35,000 and Gosho has provided equipment credits amounting to LSd 831,000. According to the financial plan, the principal spon- eors, narr:ely., Aboulela Trading Company Ltd., H. & V. Kattan, Qeretco S.A. and Ramjee Samjee Virani, Will hold 55~ and Gosho 1oi of the subscribed share capital. The principal sponsors are among the most prominent Sudanese businessmen, importers and wholesalers of textiles. Gosho, established in 1917, is now one of the major Japanese export-import firms, with branches and associated concerns throughout the world. In addition to its financial participation, Gosha will also provide managerial and technical services to KSW. •