Announcement of IFC Helps Finance First Turkish Heavy Diesel Engine Plant on May 26, 1982

IFC Press Release No. 82/28 Wednesdav, May 26, 1982 IFC Helps Finance First Turkish Heavy Diesel Engine Plant The first heavy diesel engine production facility in Turkey will be built in an DM88 million project financed by Turkish and German institutions and companies and the International Finance Corporation (IFC). A new company, M.A.N. Motor Sanayi ve Ticaret A.S., (M.A.N. Motor) has been established by Ercan Holding, a diversified Turkish company with extensive experience in the automotive field, and M.A.N. Maschinenfabrik Augsburg - Nurnberg A.G. (MAN), the technical partner, a diversified West German company maufacturing power generation, transport and communications equipment, and heavy industrial machinery, as well as engines and commercial vehicles. Ercan Holding and a Turkish co-investor are providing DM16 million equivalent in equity; MAN, DM15 million; and other private investors, DM13 million. IFC, an international organization that assists the private sectors of developing countries, is lending DM22 million for the project; Turkiye Sanayi Kalkinma Bankasi A.S. (TSKB), DM16 million; and domestic banks, DM6 million. M.A.N. Motor will build a plant in Ankara with a capacity of 7,000 diesel engines per year for heavy trucks, buses, construction machinery, marine and other applications. It will manufacture in-line, four-stroke diesel engines in the 180-320HP range and assemble engines in the 360-650HP range under license from MAN. It will also rebuild 800 engines per year. The project will help satisfy the substantial demand for diesel engines in Turkey, now met by imports. The venture constitutes a backward integration of the sponsors' existing joint partnership in MAN Kamyon ve Otobus Sanayi, which manufactures trucks and buses using imported engines. The project will be one of the first major private foreign joint ventures to be undertaken since the Turkish Government instituted economic reform measures in 1980 and 1981. It is in line with the Government's efforts to restructure the Turkish automotive sector to make it more efficient and increase local content. -2- In addition to providing the country with its own source of diesel engines, the enterprise will benefit the economy through estimated net foreign exchange savings of $32 million a year. [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) 676-0393.]