Announcement of IFC to Lend a Further US $6.5 Million to Indian Watchmaker January 23, 1989

S~0htreet N W /l61ll()1l(1I 1111 tcilOl X tn, D C 20433 USA January 23, 1989 Ekwow Spio-Garbrah Press Release No. 89/30 'T(202) 473-7716 IFC TO LEND A FURTHER US$6.5 MILLION TO INDIAN WATCHMAKER The International Finance Corporation (IFC) signed an agreement in India today to make a Yen 815 million loan (equivalent to US$6.5 million) to Titan Watches Limited to enable the Indian watchmaker to construct a plant to make 1.5 million watch cases a year. IFC, an affiliate of the World Bank, is the largest source of project finance for private investment in developing countries. IFC approved its first investment in Titan in January 1987, consisting of a loan of SwFr 23.1 million (the equivalent of about US$16.5 million) and equity of Indian Rupees 5 million.(equivalent to some US$0.4 million). Titan is owned by the Tamil Nadu Industrial Development Corporation (26 percent), Tata companies (24 percent), France Ebauches SA (5 percent), the Unit Trust of India (4 percent), directors and employees (3 percent), IFC (2 percent), and the Indian general public (36 percent). Titan began to produce quartz analog watches at its plant in Hosur, Tamil Nadu, in 1987 by manufacturing the watch movements but buying the cases as well as dials, glasses, and straps for final assembly. In its first year of operation, the company sold almost 350,000 watches, establishing itself in India as a much sought after brand name and a market leader in quartz watches. Titan has also begun to export watch components from India. -2- The new IFC loan will enable Titan to manufacture 75 percent of its requirements for watch cases, thereby increasing added value. It will also allow the company to introduce innovative designs and impede the imitation of its products. Titan will use case-making equipment from Citizen Watch Company of Japan, which will also provide training to Titan employees. Titan's expansion program is estimated to cost the equivalent of US$20.8 million and the new plant is expected to to be in full production by 1992. The expansion will create 400 more jobs in addition to Titan's current work force of 700. Since 1959, IFC has invested over US$500 million in India's private sector. - END -