Announcement of New IFC Support for Enka de Colombia Four Million Ninety Thousand US Dollars for Synthetic Fibers Firm on May 20, 1974

INTERNATIONAL FINANCE CORPORATION . 1 8 1 8 H STREET. N.W .. WASHINGTON D. C. 20433 TELEPHONE: EXECUTIVE 3-6360 IFC Press Release No. 74/10 For use in morning newspapers of Monday, May 20, 1974 New IFC Su ort for Enka de Colombia US 4.9 Million for Synthetic Fibers Firm A third investment in Enka de Colombia, S.A., a leading synthetic fabric manufacturer, is ·being made by the International Finance Corporation (IFC), the private enterprise financing affiliate of the World Bank. The investment consists of a loan of US$4 million and an equity subscription of U8~900,000 equivalent, to help finance an expansion of the Company's faci- • lities near Medellin. The total cost of t~e project has been estimated at US$14.l million. It represents part of a continuing investment program undertaken by Enka to keep up with rapidly increasing demand. The current phase includes the installation of new facilities to increase the Company's annual output of nylon and texturized polyester filament by 950 and 1,050 tons respectively. IFC first associated itself with Enka in 1966 through an equity in- vestment of US$900~000 equivalent. The second IFC investment in the Company, a loan of US$1 million and an equity subscription of 700,000 equivalent, was made in 1969. Background Established in 1964, Enka is the largest and most diversified sys- • thetic manufacturer in Colombia. It produces polyester filament, polyester  - 2 - • staple fiber, nylon filament and nylon tire yarn and f~brics. Its technical partner is AKZO, N. V., one of the larger producers of synthetic fibers, che.- micals and pharmaceutical produc,ts in continental Europe. Local partners include Fabricate, Tejicondor, Confecciones Colombia, Hilanderias Medell1n, all of which are major tfextile manufacturers and important customers of ;\ ,\ . Enka, and two financing ':institutions -- Corporaci6n Financiera Nacional and Corporaci6n Financiera de Caldas -- which have also been assisted by IFC. Financing Equity capital totalling US$5.9 million equivalent will be subscribed by.existing shareholders {US$5 million) and by IFC (US$900,000). Loan capital totalling US$5.2 million will be provided by IFC (US$4 million) and • by Corporaci6n Financiera Nacional (US$1.2 million). Economic Effects Enka's expansion will strengthen the Colombian textile industry, which is efficient and internationally competitive and one of the most ,.,·. ' ,. important in Latin .America, by providing it with synthetic fibers increa- singly demanded but currently in very short supply. This will be IFC's 30th investment in Colombia, a country where the Corporation's gross committments now total US$24.9 million. •