Announcement of Two and a Half Million Dollar Loan to Private Peruvian Company for Cement Plant Construction in Pacasmayo on April 19, 1955

.. FOR IMMEDIATE RELEASE INTERNATIONAL BANK FOR • . R,f-CONSTRUCTION AND DEVELOPMENT , CWORLD ,BAN'K) 1818 H STREET, N.W., WASHINGTON 25. D.C. TELEPHONE: EXECUTIVE 3-6360 FRFSS RELEASE NO. 400 SUBJECT: Loan in Peru. April 191 19$5 'The World Bank today made a loan of $2 • .$ million to a private Peruvian company to help finance the construction of a Portland cement plant at Pacasmayo in northern Peru. The boi,~ower is the, Compania Nacional de ,Cemento Portland del Norte.,. s.A. The loan is guaranteed by the Government of Peru. It is for a term of 1$ years and bears interest of 4-.$/8% per annwn., including the statutory 1% commission. •~ Amortization will begin ~-Y 1., 1958. The Ma.nQ.facturers Trust Company is participating in the loan, without the World Ban..~•s guarantee., to the extent of $310,000, representing the first four maturities falling due in 1958 and 1959. Peru now has two cement pla.nts wliich are located in the Lima area, about 400 miles sout,h of the site of the new pla.nt. Cement has been in such demand in recent. year~ that the combined producticm or the two plants has been inadequa.t'S ·for Peru• s requirements and cement has been in short supply. The Paca.~yo plant will eerve the · coastal region of northern Peru., an area wider going considerable a g:ricult ural and industrial development. The consumption of' cement in the region has quadrupled in the past six years, reaching a total of 134,000 tons in 19$4. It has bee~ used for roa~ building, irrigation works, dams and building construction. It is expected that this mark,,t will continue to grow. • The new plant will_,produce about 100,000 tons of cement annually, and is e~- pected t,o come into operation in 1957. The plant will be of modern design and will  . .. 2 - ••• include complete,power plant facilities. Limestone and shale in the vieinity '• are suitable for the manufacture 0£ cement and the proven reserves of limestone are sufficient to operate the plant for more than 25 years. The total cost of the project is estimated at the equivalent·or $5 million, incluqing interest during constrtiction and initial working capital. The Compania Nacional de Cemento .Portland del Norte has an authorized share capital of 50 million sole.s;:-($2.5 million), of which 18.5 million soles has been paid up. The company has a binding obligation from the subscribers to pay up the remainder when called. The management of the company is under a Board of Directors composed ot well-lmown businesamen. The firm will retain a consulting engineer to supervise construction of the plant and will engage an experienced plant manager to oper~~s it. This is the sixth World Bank loan in Peru and the first to be made to a private Peruvian company. It brings the total amount lent in Peru to $31 million • • • The other loans were for t..'1e following purposes: $2 .5 million for jmprovement of the Port of Callao; two loans totaling $3 million to purchase equiprnmt for the agricultural machinery pools of the Servicio Coop era tivo Interamericano de Produccion de Alimentos; $5 millioh to expand the lending operations of the Banco de Fornento Agropecuario; and $18 million for thi~ Quiroz-Piura. project to irrigate some 12$,000 acres of wasteland in northern Peru. After having been approved by the Bank's Executive Directors, today's loan documents were signed by His Excellency, Don Fermmdo Berckemeyer, Ambassador for Peru in th~l United states, on behalf; of the Government of Peru~· by Max Calderon cynch, General Manager, and Emi.lio irl.thaus, on behalf or the Compania Nacional de Cemento, Portland del Norte., s.A., and by J. Burke Knapp, Director of Operations, Weste1'Il Hemispher~, on behalf of the World Bank • •