Announcement of Indian Fertilizer Company to Receive $28 Million IFC Loan January 24, 1989

January 24, 1989 Ekwow Spio-Garbrah FO, Press release No. 89/31 202/473-7116 INDIAN FERTILIZER COMPANY TO RECEIVE $28 MILLION IFC LOAN The International Finance Corporation (IFC) has signed a loan equivalent to US$28 million to the Gujarat State Fertilizers Corporation (GSFC), India's largest fertilizer and petrochemical complex, to help finance a new US$280 million caprolactam plant. IFC, an affiliate of the World Bank, is the largest source of direct project fina'ncing for private investment in developing countries. The loan will enable GSFC to expand its capacity of caprolactam production from 25,000 metric tons per annum (MTA) to 75,000 MTA. Caprolactam is the principal raw material in the manufacture of nylon fiber and tire cord. Currently, more than seventy percent of India's requirement is imported. The license, technical assistance, and engineering will be provided by a consortium of companies comprising BASF of Germany, Uhde of Germany, Enco Engineering Chur of Switzerland, and Polimex of Poland. Local engineering will be provided by Uhde India. GSFC was established in 1962 as a joint venture between the Government of Gujarat, several Indian financial institutions, and the Indian public to produce fertilizers. The Company has subsequently expanded and currently produces nearly 1.2 million MTA of fertilizers. It has also diversified into the industrial resin business and manufactures caprolactam, nylon chips, melamine, and methacrylates. GFSC, which is implementing a major expansion and diversification program, had gross sales equivalent to US$360 million in calendar 1988, a 50% increase over calendar 1987. -2- The IFC loan will be provided in three tranches of different currencies: U.S. dollars, Deutsche mark, and Swiss francs. Since 1959, when IFC made its first investment in India, IFC's portfolio in the country has expanded to include investments in automobile assembly, transmissions, fertilizers, steel, computer services, shipping, cement, watches, development, housing and leasing finance, and now, petrochemicals. The value of IFC's current portfolio in India exceeds US$200 million.