Announcement of IFC Assists Five Million Twenty Thousand US Dollars Madagascar Shoe Project on August 26, 1980

International Finance Corporation • 1818 H Street. N.W. Washington. D.C. 20433, USA 202-477-1234 IFC Press Release No. 81/13 Tuesday, August 26, 1980 IFC Assists $5.2 Million Madagascar Shoe Project Shoe production in Madagascar will be expanded substantially, through an approximately $5.2 million project by Bata Societe Anonyme Malagache (BASM) that will help meet increasing local demand and generate foreign exchange savings by substituting for imports. In connection with the expansion BASM, which had been entirely owned by Bata Shoe Organization of Toronto, Canada, was opened to local ownership. Two Madagascar organizations, Bankin'ny Indostria (BNI) and Comptoir de Commerce et de Representation de l'Ocean Indien (COROI), acquired a 34 percent sharehold- ing in the Compauy • • Financing for the project includes loans of $1,250,000 by BNI and by the International Finance Corporation (IFC), the World Bank affiliate that supports private enterprise ventures in developing countries. are investing $165,000 each in equity. ENI and COROI Internal cash generation of $2.4 million completes the financial plan. The expansion and modernization will increase BASM's current output of Z.7 million pairs of leather, canvas, rubber and plastic shoes a year to 3.4 million pairs annually in 1982. In addition, the Company's production will be integrated backward by adding equipment to produce two key raw materials polyvinylchloride pellets and ethylvinylacetate foam sheets. The project includes the construction of a warehouse at the plant site at Antananarivo, new shoe manufacturing machinery, a polyvinylchloride pro- duction unit, an ethylvinylacetate production unit, utilities equipment and modernization of some existing 0ffices and retail stores. In addition to producing additional footwear, which is in short supply in Madagascar, the expansion will benefit the economy by generating foreign exchange benefits estimated at $1.5 million a year, create new jobs and, through backward integration of production, increase the local value added to shoe manu- facturing. [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.]