Announcement of IFC Supports Lebanese Industry Lends Three Million Ninety Thousand US Dollars for Textile Project on August 20, 1974

FINANCE CORPORATION H STREEt. N.W., WASHINGTON D. C. 20433 TELEPHONE: EXECUTIVE 3-6360 ·------------------------------------------~ IFC Press Release No. 74/22 . Tuesday, August 20'? 1974 IFC Supports Lebanese Industry Lends $3.9 Million for Textile Project The International .Finance Corporation ·(IFC), an affiliate cf the World Bank, is lending $3. 9 million tt) Lebanon Textiles, S .A. L. , a newly-established Lebanese company· that will manufacture high-quality coarse and medium count cotton yarn for the domestic knitting and weaving indust.ry. The loan will be IFC's third investment in Lebanon and the· second in the country's textile sector. It will help'finance a· 3,000-tons-a-year spinning mill at Amchit, north of Beirut. The mill, estimated to cost $6.4 million, will ., be equipped with modern rotospinners. Background The textile sector is one 01.f LE?banon' \ s most important manufacturing in- dustries and it has expanded rapidl;y- to become one: of the country's major export // earners. The i,ridustry's growth, h~rever, has been uneven, and lack of sufficient ',; \\ spinning capacity has resulted in stlbstantiaf yarn imports in recent years. Because of the shortage of yarn in the ··:~orld market, the knitting and weaving industry in Lebanon has suffered from, production cutbacks and low utilization of capacity. ¥inancing The company's share capital of approximately $2.5 million equivalent will be provided entirely by Lebanese investors, most of whom have extensive experience in the textile industry • •  • • - 2 - IFC, and participants in the IFC loan amounting to $2.5 million, will account for the entire loan financing. The Arab African Bank and Union de Banques Arabes et Franc;aises will be participating institutions; further, Morgan Grenf e.11 and Co. Limi te·d, has placed portions of the IFC loan in the Middle East. Economic Effects The project ~s expected to result in µet foreign exchange savings of some $2.5 million a year. The use cf rotospinning equipment will imp~ove product quality and reduce operating costs. this, in turn, is expected to improve the competitiveness of the export-ori~nted textile sector. • • •