Announcement of Textile Industry in Tunisia to Receive World Bank Assistance on June 4, 1981

IMMEDIATE RELEASE .world Bank 1818 H Street, N.W. 1 Washington, 0.C. 20433, U.S.A.• Telephone: (202) 477-1234 BANK NEWS RELEASE NO. 81/113 June 4, 1~81 TEXTILE INDUSTRY IN TUNISIA TO RECEIVE WORLD BANK ASSISTANCE The World Bank has approved a $18.6 mill ion loan to Tunisia for the textile industry in the public sector. r The $32.9 million project will help the Tunisian government to implement the first phase of the rehabilitation and modernization of the Societe Genera le des Industries Textiles (SOGITEX) holding company and its subsidiaries. This will be accomplished by improving production at its main subsidiary, Societe lndustriel le des Textiles (SITEX), and by completing preparatory work for the rehabilitation of its three other subsidiaries, Sociiti des Industries Textiles Reunies (SITER), Societe Monastirienne des Textiles (SOMOTEX), and Societe de Tissage de Moknine (TISSMOK) . • The production capacity of SITEX will be expanded by reconditioning the spinning and winding equipment and improving service facilities at the firm's plant in Sousse, and by expanding and upgrading the existing weaving and finishing facilities at the Ksar Hel lal plant. Incremental working capital will also be provided. Funds from the World Bank loan will also be used to overhaul selected equip- ment and purchase spare parts and accessories for the production facilities of SITER, SOMOTEX, and TISSMOK. Technical assistance will be provided to all companies of the SOGJTEX group to improve their management and accounting systems, and to strengthen marketing capabilities and prepare future investment plans for SITER, SOMOTEX, and TISSMOK. At ful 1 project development in 1983, the annual production of SITEX is expected to reach 13,250 tons of yarn and 26 mill ion square meters of finished denim fabric -- a 65% increase over 1980 levels. Most of this fabric is expected to be marketed in the countries of the European Economic Community. The greater volume and improved fabric quality will substantially increase the revenue- earning potential of SITEX. The World Bank loan has a term of 15 years, including three and one half years of grace, with interest at 9.6% per annum . • 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: Textile Rehabilitation Tunisia $32. 9 mi 11 ion • BANK FINANCING: $18.6 million, for 15 years, including a grace period of 3-1/2 yearsJ with interest at 9.6% per annum OTHER FINANCING: Equity contribution by the Government of Tunisia, $9.8 mill ion; Swiss commercial banks, $3 mil 1 ion; Government of Switzerland, $1 .5 mil 1 ion; IMPLEMENTING ORGANIZATION: - SOCIETE INDUSTRIELLE DES TEXTILES (SITEX) P. 0. Box 120 . Sousse, Tunisia Telex: 30763 - SOCIETE GENERALE DES INDUSTRIES TEXTILES (SOGITEX) Bir Kassaa, Tunisia Telex: 12444 PROJECT DESCRIPTION! The project will help rehabilitate and modernize the SOGITEX holding company and its subsidiaries, SITEX, SITER, SOMOTEX, 4I and TISSMOK through: (i) expansion and improvement of SITEX's production by recondition ing spinning and winding equipment and upgrading service facilities at Sousse, by expanding and upgrading the existing weaving and finishing facilities at Ksar Hell al, and by provid- i ng es s en t i a 1 i nc r emen ta l wo r k i ng cap i ta 1 ; ( i i ) ba 1an c i ng of the ex i s t i ng product i on facilities as well as overhauling of selected equipment and provision of essential spare parts and accessories to SITER, SOMOTEX, and TISSMOK; and {iii) technical assistance to help SITEX prepare and implement its rehabil~tation and expansion program, to upgrade the management and accounting systems of SITEX, SITER, SOMOTEX, TISSMOK, and the holding company SOGITEX, and to strengthen the marketing capabilities and prepare future inve5tment plans for SITER, SOMOTEX, and TISSMOK. PROCUREMENT: Prorrietary items, including components needed for overhauling of equipment and spare parts (about $5.2 mill ion) will be purchased from original machine suppl iers;accessories (about $0.5 million) will be purchased after limited international tendering; new machinery and equipment for expansion ( about $4.2 mil lion) will be procured throuqh international competitive bidding, or limited international tendering for items costing less than $100,000 and not exceeding $0.5 mill ion in total. The imported component of incremental working capital requirements (about $7.3 mill ion) wil 1 be procured through the main commodity markets (cotton), or from qual·ified manufacturers (dyes, chemicals, and spare parts for stockpiling) using 1 imited international tendering whenever possible. CONSULTANTS: About 120 man-months of consulting services will be required to assist SITEX, SOMOTEX, SITER, and TISSMOK, as well as the holding company SOGITEX, in such areas as management and accounting, marketing, and • the preparation of investment plans. ECONOMIC RATE OF RETURN: 30% ESTIMATED COMPLETION DATE:. 1983