Announcement of IFC Supports Philippine's Industrial Growth by Investing More than Two Million US Dollars for a Chemical Plant on May 4, 1973

. ' . HOLD FOR RELEASE, l • INTERNATIONAL FINANCE CORPORATION '818 H STREET. N.W .. WASHINGTON D. C. 20433 TELEPHONE: EXECUTIVE 3-6360 IFC Press Release No. 73/8 Fo£ use in morning newspapers of Friday, May 4, 1973 ine's industrial rowth 2 million for a chemical plant The International Finance Corporation (IFC), a member of the World Bank Group, is investing approximately US$2,200,000 in Victorias Chemical Corporation ( VCC) , a new Philippine company which will manufacture furfural, a chem.foal product used in industrial processes requiring selective solvents, such as oil refining. VCC will be the first furfural plant in Southeast Asia. • VCC is a subsidiary of Victorias Milling Company (VMC), the largest sugar producer in the Philippines. The pl~nt will use a new process developed in Finland and will have an annual productive capacity of 5,000 metri~ tr-::. 1 of furfural, with locally available sugar cane bagasse as the primary ..aaterial. It will be located next to VMC's existing facilities in Victor; jgro Occi- dental, 400 miles south of Manila. The process equipment for the project will be supplied by Oy W. Rosenlew AB of Peri, Finland, who will also train local personnel both in Finland and at the plant site. VMC will supply auxiliary equipment and machinery and erect the plant under the supervision of Rosenlew. Over 80% of VCC's annual output will be exported to Japan and Southeast Asian markets, and the balance will be consumed in the Philippines. The Philippine Petroleum Corporation (PPC), a company in which IFC invested $8 • million in 1971, is expected to be a major domestic consumer.  - 2 - • The total cost of the project is estimated at US$4.33 million. IFC's investment consists of a loan of US$1,850,ooo and an equity participation of US$342,000. Additional loan capital of US$1.2 million will be provided by ·the U.S. Export-Import Bank.. Other equity participations include US$1,596,000 eiquivalent by VMC, US$228,000 by a major Japanese trading company which will undertake VCC's marketing in Japan, and US$114,ooo equivalent by VMC's employees and supplier sugar. cane planters~ The project enjoys the support of the fhilippine government as a means of developing the agro-industrial export sector and, having been given "preferred pioneer" status, will benefit from certain incentives under +he Philippine Investment Incentives Act of 1967. The sponsors' initial request for the Corporation's support was received~~ Dec~~ber 1972. VCC will start • operations in late 1974 as~. local resource-based, internationally competitive compan.,, primarily oriented toward export markets. This is IFC's eleventh investment in the Philippines, a country where the Corporation's gross commitments now amount to US$0~ million • •