Announcement of Turkey Revitalizes Agroindustries on June 1, 1989

FOR IMMEDIATE RELEASE World Bank 1818 H Street, N.W., Washington, D.C. 20433, U.S.A.* Telephone: (202) 477-1234 BANK NEWS RELEASE NO. 89/83 Contact: Fawzi Rihane (202) 473-2675 TURKEY REVITALIZES AGROINDUSTRIES WASHINGTON, June 1, 1989 -- Turkey will revitalize agroindustries, which make up the largest subsector in the country's manufacturing sector, by stimulating increased production for domestic and export markets. The World Bank is supporting this effort with a loan of $150 million. The loan will support a project to provide financial resources to enable enterprises to expand their capacity to process, store and transport products such as olive oil, fruit juices, tomato paste, fruits, vegetables as well as grain and dairy products. Expanded capacity is in turn expected to generate increased production, employment and foreign-exchange earnings. The $408.7 million project is expected to assist about 250 agroindustries and create 20,000 jobs. Agroindustries contribute 30 percent of Turkey's manufactured production and nearly 20 percent of manufactured exports. Agroindustrial exports have grown by 15 percent a year over the past decade. But many firms have limited managerial ability in areas such as marketing and product quality or financial resources to cope with changing market conditions. Enterprises will benefit from credit lines to cover the foreign-exchange and working capital requirements of expansion projects. Technical assistance will be provided to participating credit institutions to improve their capability to carry out financial restructuring of enterprises and project appraisal. The project also includes assistance in implementing a fisheries development survey and a pilot training program in international marketing. Agroindustrial enterprises are expected to invest $200 million in the project. The participating credit institutions, initially the Agricultural Bank of Turkey, Halk Bank and the Industrial Investment and Credit Bank, and other banking institutions which may join the project later, will provide financing in the amount of $57.5 million and the government, $1.2 million. The World Bank loan is for 17 years, including five years' grace, with a variable interest rate, currently at 7.65 percent, linked to the cost of the Bank's borrowings. It also carries an annual commitment charge of 0.75 percent on the undisbursed balance. NOTE: Money figures are in U.S. dollar equivalents.