Announcement of IFC Invests in Ceramica Zanon in Argentina on April 8, 1996

IFC INVESTS IN CERAMICA ZANON IN ARGENTINA WASHINGTON, D.C., April 8 -- The International Finance Corporation (IFC) has signed an agreement to invest US$20 million in Ceramica Zanón S.A., a producer and exporter of ceramic tiles and porcelain bathroom fixtures in Argentina. "An important IFC focus is helping Argentine companies become internationally competitive in the newly open economy, in particular through product quality and efficiency" commented Mr. Helmut Paul, Director of IFC's Latin America and Caribbean Department. "It is a priority for IFC and the World Bank Group to help medium-sized enterprises, which have difficulty accessing term finance. Zanón is the largest industrial employer in Neuquén and we are pleased to support the province's industrial development." IFC's financing consists of a US$14 million straight loan and a US$6 million convertible loan, both for IFC's account. Zanón, a family-owned company, has also attracted equity capital from private investment funds to assist the company in its immediate expansion program. The project will improve Zanón's efficiency - already amongst the best in the world in the industry - and increase production at its ceramics plant located in Neuquen Province. Production also will be expanded at Motta S.A., a fully owned subsidiary that produces premium porcelain bathroom fixtures. Another subsidiary, Canteras Zafiro S.A., will continue to develop its quarries in order to become self-sufficient in supplying key raw materials. These productivity improvements reflect Argentina's country-wide effort to reduce costs under the fixed currency regime established after the Mexican peso crisis. Zanón has been implementing environmental improvements for many years in such areas as air emission control and liquid effluent and solid waste disposal, which meet World Bank environmental guidelines. IFC is a member of the World Bank Group and is the leading multilateral source of equity and loan financing for private sector projects in developing counties. IBRD IDA IFC MIGA ICSID