Announcement of IFC Investment in Mariwasa Manufacturing, Incorporated, Philippines on October 24, 1969

HOLD FOR RELEASE " INTERNATIONAL FINANCE CORPORATION 818 H STREE·T, N.W .. WASHINGTON D. C. 20433 TELEPHONE: EXECUTIVE 3-6360 IFC News Release No. 69/20 Subject: IFC Investment in Mariwasa For Use in Morning Newspapers of Manufacturing, Incorporated, Friday, October 24, 1969 Philippines The International Finance Corporation announced today that it will join with the Private Development Corporation of the Philippines (PDCP) in assisting the expansion of a producer of glazed ceramic floor and wall tiles in the Philippines. IFC's commitment is to Mariwasa Manufacturing, Incorporated, a young~ rapidly growing company set up by the Coseteng family and a number of other Filipino busines)smen. The Mariwasa expansion project is the first investment in which IFC and PDCP will be working together. IFC is the World Bank affiliate that invests in private • businesses in developing countries. PDCP is a private development financial corporation established in 1962 with the assistance of the ' World Bank and IFC. The IFC connnitment of $1. 3 million to Nariwasa is part of $4.1 million being raised by the company to finance its expansion program and to supply it with additional working capital. The expansion program will enable the company to increase its capacity by 75 per cent, from 9.4 million square feet per year of glazed ceramic floor and wall tiles to 16.4 million square feet. In the four years since it started production, Mariwasa has gained a firm foothold in the Philippine market and has succeeded in developing export outlets in the United States and Australia. The ceramic tiles it produces are competitive in quality and price with tiles of other major exporting cotmtries. The additional I 7 million square feet of 'glazed ceramic floor and wall tiles per year that will result from the expansion project is intended for export,.. • (more)  - 2 - • Mariwasa's contribution to the Philippines' export income will further the trend toward diversification of exports and will, thus, help reduce the dependence of the Philippines on its traditional exports of sugar, coconut products, and woe:-,~ products. Work has begun on Mariwasa's new facilities, which will be added to the company's existing plant near Manila. The expansion program w::tll create jobs for some 140 additional workers. The IFC commitment to Mariwasa is essentially a standby undertaking, available to Mariwasa if the company does not arrange other financing on satisfactory terms. IFC has agreed to purchase up to $512,820 equivalent in convertible preferred shares and to make a loan of up to $769,000. The remainder of the funds required for Mariwasa' s expansion program will be 4t ·provided by long-term loans of $1.3 million from PDCP and $366,000 equivalent from cc.immercial banks and other investors in the Philippines. The PDCP loan will be financed out of a World Bank loan credited to it. Equity investments in Mariwasa will be made by PDCP, the Philippine American Life Insurance Company, the present owners of Iv1ariwasa, and other investors. Cash generation will account for the balance of the financing. The financial plan for 1'-iariwasa' s expansion program is: (more) •  - 3 - • Loan Capital U.S. Dollars and Dollar Equivalents (million) Private Development Corporation of the Philippines 1.300 International Finance Corporation 0.769 Philippine commercial banks and others 0.366 2.435 Equity Capital Preferred Shares: International Finance Corporation 0.512 Private Development Corporati9n of the Philippines 0.255 Philippine American Life Insurance Company 0.255 Other investors 0.034 Common Shares: Present owners 0.342 1.398 Cash Generation 0.220 • TOTAL 4.053 IFC's $1.3 million connnitment to Mariwasa is the Corporation's second invest- ment in a Philippine company this year. IFC recently made a $4.5 million investment in the Philippine Long Distance Telephone Company, to help finance an expansion program. Including earlier investments in two other companies -- the Private Development Corporation of the Philippines and the Manila Electric Company IFC commitments to four Philippine enterprises now total $22.2 million. II ii !I •