Announcement of IFC Investment in Empresa de Curtidos Centro Americana, S.A., Honduras on May 4, 1964

' + -~"" 1 • \ • ' ... IFC Press Release No. e+/9 Subject: IFC investment in Empresa de For Release .AM Newspapers Curtidos Centro Americana, S .A., Monday, May 4, 1964 Honduras The International Fina.nee Corporation, an affiliate of the World Bank, has agreed to provide loan and share capital amounting to $350,000 to Empresa de Curti- dos Centro Americana, S.A. (ECC.ASA), to assist in financing a new integrated leather tannery in Honduras. Total f\mds required for erecting the ·iiannery and providing initial -working capital are estimated at $760,000. This is IFC's first investment in Honduras. The Corporation's commitmer-.t con- sists of a $295,000 loan and a subscription to 1,100 shares of common stock, each with a par value of Lempiras 100, for the equi7alent of $55,000. The remaining funds~ totaling $410,000 of share capital, have been raised from private investors, rrw,inly Honduran businessmen. The principal sponsors of the project include businessmen with considerable experience in management and operation of tanneries • The tannery will be located on the outskirts of Sa~ Pedro Sula, a major population center, and will employ some 70 oorkers. It is estimated that annual production beginning in th~ third year of operations will be about 3.6 million square feet of side-upper and split leathers, and 500,000 pounds of sole leather. The company expects to commence operations in 1965~ and to reach full capacity by 1967. The operation of the new tannery 'Will provide Honduras with an important eco- nomic asset. The output of the tannery will help to develop the Honduran shoe industry, and to enable the industry to rely almost entirely on domestic raw materials . In addition, by using locally available hides, ECCASA will meet much of the demand for leather which would. otherwise be imported, thus providing a saving in foreign exchange. - 2 - Investment in the tannery takes place against a background of accelerated industrial growth in Honduras, brought about largely as the result of • the formation of the Central American Common Market. There exists a good demand for leather in Honduras and within the Common Market area, and it is expected that this market will continue to grow. • • j' nil'