Announcement of IFC Invests Two Million US Dollars in Philippine Industry Helps Finance a Ferroalloys Project on April 30, 1974

·Fo.R fMMEDIATE RELEAsE· INTERNATIONAL FINANCE CORPORATION 1818 H STREET. N.W .. WASHINGTON D. C. 20433 TELEPHONE: EXECUTIVE 3-6360 IFC Press Release No. 74/8 For use in morning newspapers of Tuesday, April 30, 1974 IFC Invests $2 Million in Phili ine Industr Helps Fina.nee a 4.7 Million Ferroalloys Project The International Finance Corporation (IFC), a World Bank affiliate is investing approximately $2 million in Maria Cristina Chemical Industries, Inc. of the Philippines to help finance a new electric ferroalloys furnace that will double the company's productive capacity. Maria Cristina Chemical Indust:r•ies, with plant location at Iligan, on the Island of Mindanao, is the onl.y Philippine producer of calcium carbide and ~ ferroalloys. Its existing furnace produces annually approximately 26,000 metric tons of calcium carbide and 2,000 tons of ferroalloys primarily for domestic use. Several hundred tons of calcium carbide are exported each year. The new electric arc. furnace with auxiliary equipment will produce apprb~i_,,,. mately 17,000 tons of ferroalloys annually, about half for export. IJ.~i>:.2 comple- tion of the approximately $4.7 million project scheduled for mid-1975, the exis- ting furnace will be used solely to produce calcium carbide- The principal raw materials used by the company include limestone, silica quartz, coal, charcoal, manganese ore and scrap iron and a.re available at low cost in the Philippines -- mostly on Mindanao or nearby island~. In addition, the power intensive project will utilize surplus hydroelectric power available in the Iligan area. This permits the company to produce for world markets at • competitive costs • Financing - 2 - • The IFC investment consists of a loan of $1.55 million and a share subscrip- tion of approximately $452,000 equivalent. Other loan capital amounting to approximately $1.62 million will be provided by the Private Development Corpora- tion of the Philippines, a development finance company which. the World Bank and IFC helped organize and finance in 1963. In addition to IFC's equity investment, other share subscriptions totaling $505,000 will be made by: the Guevara family, who founded Maria Cristina Chemi- cal Industries in 1952; CCP Securities Corporation; the Tanchan family; the Phi- lippine American Life Insurance Company; Maria Cristina Chemical Industries em- ployees and others. These new subscriptions will be supplemented by $536,000 from the company's projected earnings during th~ construction period which wiJ.l • be applied to the project. Economic Effects The project will result in net foreign exchange: benefits estimated at $4 million a year by supplying domestic users with ferroa.l.loys that are presently imported, and by exporting the balance. The use o'~f local raw materials will have a beneficial secondary effect on' the economy and employment in a depressed area. Those benefiting include more than 2,000 new backyard charcoal makers who will be financed by the Development Bank of the Philippines to supply the company. The Development Bank estimates that the average producer will then be able to earn after expenses .about $600 a year in an area where annual family income now averages $220 or less. The project will also result in broader ownership of the company including increased employee participation in the equity. •