Announcement of IFC Supports Sri Lankan Industry Nine Million Eighty-Six Thousand US Dollars for Polypropylene Bags Project on June 18, 1979

0[?@ International Finance Corporation • "1818 H Street, N.W. Washington, D"C. 20433, U.S.A. 202-477-1234 IFC Press Release No. 79/34 Monday, June 18, 1979 IFC Supports Sri Lankan Industry $986,000 for Polypropylene Bags Project International Finance Corporation (IFC) will help an established Sri Lankan business group to expand and diversify its activities through a $4 million pro- ject to manufacture annually 1,680 metric tons of woven polypropylene bags. IFC, an affiliate of the World Bank, is investing $96,000 equivalent in equity and providing a $890,000 loan for Mikechris Industries Limited. Mikechris Industries is a new company sponsored by Ceylon Paper Sacks Limited (CPS), which manufactures paper bags and polythene film and owns a resort hotel and garment factory. CPS will finance $827,000 of equipment for the project. CPS shareholders are • providing $320,000 equivalent in equity and the Development Finance Corporation of Ceylon, a local development finance company assisted by IFC in the past, $65,000 equivalent. Suppliers' credits of $1j008,000 equivalent and local bank loans (Development Finance Corporation of Ceylon) of $327,000 equivalent and $500,000 in short term debt complete the financial plan. Mikechris will construct a plant at Seeduwa, about 15 miles north of Colombo, with a capacity to produce 12 million woven polypropylene bags a year. It will help meet rapidly growing demand in Sri Lanka for packaging for industrial and agricultural products and result in estimated foreign exchange savings of $1.7 to $2.2 million annually. The project is in line with Government policies to encourage the private sector to increase its capacity and expand into new industries. It will also benefit the Sri Lankan economy by generating 230 new jobs. In addition to its financing, IFC also supported the project by working closely with CPS in refining project arrangements and in financial planning. Equipment for the project is being supplied by two Austrian firms, Lenzing • & Co. and Starlinger & Co • (Any inquiries strictly relating to IFC's participation in this project should be directed to the IFC Information Office, 1818 H Street, N.W., Washington, D.C. 20433, Telephone (202) 477-2032.)