Announcement of IFC, U.S. Banks Help Finance Mexican Particleboard Project on November 14, 1979

• International Finance Co1poration 1818 H Street. N .W. Washington. D.C. 20433, U.S.A. 202-477-1234 IFC Press Release No. 80/8 Wednesday, November 14, 1979 IFC, U.S. Banks Help Finance Mexican Particleboard Project A loan agreement for a $25 million loan in support of a $45 million· particle..::. board p~oject was signed in Mexico City today by Industrias Resistol, S.A., ~d the International Finance Corporation (IFC). Three United States banks headed by BankAmerica International G!'oup, and including Citibank, N.A., and Mellon Bank, N.A., are participating in the IFC loan. The venture is the first step in a major expansion program by Resistol and consists of the construction and operation of a new plant at Zitacuaro, Michoacan, • designed to produce annually 104,000 cubic meters of particleboard in a range of thicknesses. The project also includes expansion and modernization of Resistol's facilities for producing laminates, formaldehyde and other products related to finished board production. The project will help integrate the operations of Resistol, which is a key producer in the Mexican markets for styrene polymers, industrial chemicals, vinyls, resins, plastic laminates and other related products. The Company uses its own adhesive, plastics and resins to manufacture laminates for particleboard currently purchased from other companies. The project will benefit the Mexican economy by reducing the need for particleboard imports and by helping to meet rapidly growing domestic demand. It will also utilize waste wood materials -- freeing higher value lumber and wood materials for other uses. The new plant will be located about 100 miles west of Mexico City in a less developed region and is expected to create some 120 direct jobs and an additional 400 indirect jobs in wood harvesting. IFC, the World Bank affiliate that assists the economies of developing coun- • tries by supporting the private sector, is lending !2'.~ million for the project • Of this, $8 million is for IFC's own account. Bank of America, N.T. & S.A., Citibank, N.A. and Mellon Bank, N.A. are taking up the remaining $17 million of the loan. A $10 million loan being arranged with U.S. insurance compani.es and  - 2 - loan being arranged with U.S. insurance companies and $10 million in Company • cash generation complete the financial plan. The investment agreement for the project was signed by Mr. Adolfo Patron, Director-General of the Company,and Mr. Giovanni Vacchelli, IFC's Director of Investments for. ·)-he Central American and Caribbean area. Resistol is majority owned by Mexican investors, including Sociedad de Fomento Industrial, S.A. de C.V. (DESC), a widely held Mexican investment company which supports the country's economic development objectives. Monsanto Company of the U.S. is technical partner in the Company and a minority share- holder. • (Any inquiries strictly relating to IFC's participation in this project should be directed to the IFC Information Office, 1818 H Street, N.W., Washington, D.C. 20433, Telephone (202) 676-0394.) •