Announcement of IFC Supports Zambian Industry by Investing One Million Twenty Thousand US Dollars for Leather Tannery on June 27, 1973

,., l . • • ... . / • • ' • ' ""· :•, ' 1 .1 .~B:DJ.ATE R~LEAS.~. TERNATIONAL FINANCE CORPORATION (\ ·· THF [ T NW., WASHINGTON 0. C. 20433 TELEPHONE: EXECUTIVE 3-6360 '\___~ IFC Press Release No. 73/i.7 Jun<e 27, 1973 IFC Supports Zambian Industry US$1.2 million for leather tannery \) The International Finance Corporation (IFC), a member of the World Bank Group~ is making a second investment in Zambia Bata Shoe Company Limited, the lar- gest producer and marketer of shoes in Zambia. The investment is in the form of a loan of US$1.2 million, to help finance the construction and operation by the Com- pany of a tannery to be located at Kafue, near the Company's facilities at Lusaka. This tannery will transform 300 local raw hides daily into leather to meet the re- quirements of the shoe factory, an expansion of which IFC supported in 1972. The total cost of the project has been estimated at US$2,492,000. Loan capital of US$1,200,POO will be provided by IFC, and cash generation will account for the remaining US$1,292,000. Participating with IFC in this investment is National and Grindlays Bank, Limited, of the United Kingdom. Zambia produces about 72,000 raw hides per y~ar. About 70 per cent are exported~ and most of the remainder goes to waste. At the same time Zambia imports all its leather requirements. The country, being landlocked and having high trans- portation costs, can thus achieve substantial benefits by establishing a tannery which would use local raw hides to produce leather to meet domestic requirements. The project will provide the Company with a reasonable secure supply of leatherj thus reducing its reliance on imports. Considered as an integral part of Zambian Government's policy aimed at a progressive integration of the leather and shoe industry, it will be implemented in the context of the Second National Development plan which includes incentives to potenti.'3.J. investors in the manu- facturing sector. (', - 0 -