Announcement of IFC Supports Tunisian Industry Invests in Aluminum Fluoride Project on July 3, 1974

.NT E RN AT ·10 NA L FINANCE CORPORATION 1818 H STREET. N.W., WASHINGTON D. C. 20433 TELEPHONE: EXECUTIVE 3-6360 IFC Press Release No. 74/19 Wednesday, July 3, 1974 IFC Supports Tunisian Industry Invests in Aluminum Fluoride Project The International Fin~.nce Corporation ( IFC), a member of the World Bank Group, will assist a $13.8 million aluminum fluoride project in Tunisia with a $621,000 equity investment. The investment is being made in Industries Chimiques du Fluor, a Tunisian company, which will build a 22,770 tons-a-year aluminum fluoride plant near Gabes on the coast in the sourthern part of the country. Production will be based on fluorspar produced by SocH~i~e Tunisienne d'Expansion Miniere; sulphuric acid produced by Industries Chimiques Maghrebines both Tunisian companies; and on imported alumina. Background The project was encouraged by the Tunisian Government as a means of up- grading and increasing exports of local fluorspar products. It is being spon- sored by Banque pour le Developpement Economique de la Tunisie, a development finance company formerly known as Societe Nationale d'Investissement in which IFC is a shareholder, and by various other Tunisian companies. Financing Financing for the project includes share capital of about $3.1 million and loans of about $3.6 million from the Tunisian Government, $6 million from  - 2 - French banks and $1.1 million from Banque pour le Developpement Economique • de la Tunisie. IFC's equity investment will assure that the. ownership of the company will be majority non-public. Approximately $2 million of the share capital will be held by IFC; Banque pour le Developpement Economique de la Tunisie; and various other investors. The rezaaining $1.1 million equivalent equity will be held by four public companies: Societe Industrielle d'Acide Phosphorique et d'Engrais, Societe Tunisienne d'Engrais Chimiques, Industries Chimiques Ma.ghrebines and Societe Tuni,;·d.enne d 'Expansion Miniere. Economic Effects The project is expected to generate about $5 million of net foreign exchange earnings a.nnually·beginning in 1977 when production is scheduled to I reach its anticipated normal level. It will contribute to the development of southern Tunisia, a poor a1'"ea which the Government is endeavoring to promote. In addition, it will create, directly and indirectly, some 240 new jobs. The large size of the plant is expected to result in economies of scale which, together with the local .availability of raw materials, will make its products competitive in international markets. Moreover, the plant can be diversified, at relatively low cost, into the manufacture of fluoride deriva- tives which have a wide marketability. IFC's participation in the equity supports the Government's policy of encouraging private equity investment in local industry. It is anticipated • that when IFC eventually sells its holdings, preference will be given to Tunisian private investors.