Announcement of World Bank Lends Eighty Million Dollars for Fertilizers in Mexico on April 16, 1979

· FOR.. IMMEDIATE RELEASE · . . -VVorld Bank 1818 H Street, N.W., Washington, D.C. 20433, U.S.A.• Telephone: (202) 477-1234 BANK NEWS RELEASE NO. 79/74 Apr i l 16, 1979 WORLD BANK LENDS $80 MILLION FOR FERTILIZERS IN MEXICO The World Bank will support a second fertilizer project in Mexico with a loan of $80 million to help finance a manufacturing complex aimed at insuring sufficient capacity to meet the country's expected increases in demand for finished phosphatic and nitrogenous fertilizer r ,ducts up to the mid-1980 1 s. The project will be located at Lazaro Cardenas, on the west coast of Mexico, in an area with good access by rail, road, and sea, and near fts main markets. The project was prepared and will be implemented by Fertilizantes Mexicanos, S.A. (FERTIMEX), one of the largest industrial and trading enterprises in Mexico. FERTIMEX is the country's main producer and sole distributor of fertilizers, and one of the government's instruments for • agricultural development • The complex which the Bank loan will help finance will produce 275,000 tons per year (tpy) of diammonium phosphate, 250,000 tpy of compound ferti 1 izers (NPK) in four different grades, 190,000 tons of sol id ammonium nitrate and 10,000 tons yearly of marketable, 54% phosphoric acid. The manufacturing complex wi 11 include facilities to produce these fertilizers as well as for generating steam and critical power requirements, and for water supply and storage of raw materials and finished products. All potential noxious emissions will be controlled to safe and environmentally acceptable levels by adequate design and appropriate clean-up installations. The project will make extensive use of domestic raw materials. Its economic benefits are expected to be substantial because of savings in transportation of raw materials and finished products and because it will realize economies of scale in production. Also, the projec~ is expected to stimu1ate the development of the Lazaro Cardenas development pole, attracting investment away from the congested urban areas in Central Mexico. The World Bank's $80 million loan is being made to Nacional Financiera, S.A. and FERTIMEX, for a term of 15 years, including four years of grace, at 7% annual interest. • NOTE: Money figures are expressed in U.S. dollar equivalents • FORM NO. 1121 (5-76) T E C HN I CA L DA T A PROJECT: COUNTRY: TOTAL COST: Fertilizer Mexico $30 l. 3 mi 11 ion • BANK FI NANC I NG : $80 million for a term of 15 years, including 4 years of grace, at 7% per annum. OTHER FINANCING: Loans: Borrowing from banks, $95.4 million, bilateral credits, $4.6 million. Equity: Government contribution, $95=4 million, cash generation, $25.9 million. IMPLEMENTING ORGANIZATION: Fertilizantes Mexicanos, S.A. (FERTIMEX) Morena 804 Mexico 12, D.F., Mexico TELEX: 383-01771136 PROJECT DESCRIPTION: Construction of a fertilizer complex at Lazaro Cardenas, on the west coast of Mexico, to produce 275,000 tons per year of diammonium phosphate, 250,000 tons per year of compound fertilizers as well • as 190,000 tpy of solid ammonium nitrate and 10,000 tpy of marketable phosphoric acid • PROCUREMENT: All equipment items financed under the Bank loan will be procured by international competitive bidding according to Bank's guidelines except for imported small items totalling less than $100,000 each (up to a maximum of $16 million) and proprietary and critical items requiring a long lead time for delivery not exceeding $10 million, which wi 11 be procured after prudent international shopping. Local suppliers will be accorded a 15% margin of preference of the c.i.f. price or the applicable import duties and taxes, whichever is lower. Procurement of all local equipment and materials not being financed by the Bank, and award of civil contracts will be according to FERTIMEX's procedures involving competitive bidding among local suppliers. CONSULTANTS: Foreign engineering firms have already been appointed to assist in licensing, basic engineering, design, forei8n procurement services, technical coordination, and supervision of local engineering firms. ECONOMIC RATE OF RETURN: ESTIMATED COMPLETION DATE: 12.3% 1981 - 0 - •