Announcement of IFC Supports Shoe Manufacture in Zambia by Investing One Million Ten Thousand US Dollars on March 20, 1972

( FOR - IMMEDIATE RELEASE . INTERNATIONAL FINANCE CORPORATION 1818 H STREET, N.W., WASHINGTON D. C. 20433 TELF,;PHONE: EXECUTIVE 3-6360 /i IFC Press Release No.I'.\ 72/4 March 20, 1972 \1 \: '\ IFC Su~ports Shoe ranufacture in Zambia 01.1 Milli'on for Expansion Program The International Finance Corporation is investing $1.1 million in a $2 million expansion of a shoe coq,any in Zambia. Zambia Bata Shoe CoJDl)any Limited, established in 1963, is part of the Bata Shoe Organization, a worldwide group of shoe manufacturing and marketing companies. Using the latest type of equipment, it produces 900,000 pairs of plas~ic, rubber and canvas anc:J leather shoes a year. The company markets shoe$ • through its own retail shops and through independent retail outlets • IFC 's support for this project will have two important results. One will be that an expansion of 50% in the area of the factory will enable (' \ annual output to be more than tripled,··" to 2,856 ,000 pairs of shoes. The new facilities will allow an increase in the production of types of shoes now manufactured; they will also mak~ possible the production of protective footwear, work boots, children's leather shoes and new types of rubber and canvas shoes. The second result will he that the financial arrangements connected with the IFC investment will eventually transform a company wholly-owned by private foreign interests into one with a significant l9cal ownership. Bata is to make a public offering in Zaniliia of a proportion of the shares in the company. After these shares are sold, IFC proposes to of fer its shares in • Zambia • /-,re • IFC P.R. No. 72/4 -- Zambia - shoe manufacture • - 2 - Backgromd Between 1964 and 1969 Zambia's national income grew at an average annual rate of 13% in real terms. The economy is still dominated by copper mining ? ; but, as' 'a consequence of government policy, the importance of construction and manufacturing has been increasing. As a result of IFC's investment the company has decided to speed up its 1972-75 investmant program, so that all new plant and equipment will be installed by the end of 1973. Acceleration of this program will make it possible for the company to CQver the growing local market requirements. Financing IFC's investment will consist of a loan of $850,000 and $227,500 in equity. Barclays Overseas Development Corporation Limited and National • & Grindlays Finance and Development Corporation, both of the United Kingdom, are participating in the IFC investment. Grindlays Bank International (Zambia) will act as agent for National & Grindlays Finance and Development Corporation. The balance of the financing will come from cash generation. Economic Effects Generally the project fits the objectives of Zambia's Second National Development Plan for 1972-76 to concentrate on agriculture and manufacturing. The expansion will provide jobs for about 300 Zambians, including about 30 at a management or supervisory level who will join the 45 Zambians already at this level. Since 1971, the company has initiated a tmique program to develop a network of Zambian shoe retailers by helping them to renovate their shops and • providing them with extensive business training. The program, called "Partners in Progress," is in line with the policy of the Zambian Government to assist Zambian entrepreneurs. - 0 -