Announcement of IFC Investment in Compania de Cemento Pacasmayo S.A. Peru on July 9, 1964

1 KNTERNATIONAL FINANCE CORPORATION I • ~ 1 3 1 8 H STREET, N. W., WASHINGTON 25, D. C. TELEPHONE: EXECUTIVE 3-6360 I I IF~ Press Release No. 64/12 Subject: IFC Investment in Compania. de For release AM newspapers Ceme11to Pacasmayo S.A. Peru Tnursd,J,y, July 9, 1964 The International Finance Corporation, a.n affiliate of the World Bank, with the participation of four American and tvro Swiss financial institutions, bas agreed to help finance an expansion program which will double the cement production capacity of" Cornpania de Cemen·co Pacasmayo S.A. in northern Peru and will lay the foundation for a further expansion. The American institutions are: Chemical International Finance Ltd., a. sub- sidiary of Chemical Bank New York Trust Company; Philadelphia International Invest- ment Corporation, a subsidiary of The Philadelphia National Bank; First Pennsyl- vania Overseas Finance Corporation, a subsidiary of The First Pennsylvania Banking and Trust Company; and Mellon Bank International, a subsidiary of Mellon National B@k a.nd Trust Company. The Swiss institutions a.re: Ha.ndelsfinanz A.G • ., Zurich; and Internationale Finanzierungs Aktiengesellscha.f't, Basel. The estimated cost of the program is about $3. 7 million. The IFC investment in 'Which these institutions are participating will consist of a loan of $1.6 mil- lion and the right to subscribe to shares of the Company's common stock. Cash pro- vided by the Company and the shar~~olders, together with supplie~s• credits, will complete the i1~.ncial plan. The majority of Pacasmayo 's shares is held by Peruvians. In total, there a.re more than 100 nominative shareholders; the principal holders include several Peru- v~;;J'.l and other industrial, mining and commercial groups. IFC's investment continues a long association between the Company and the W,:rcld Bank group. A World Bank loan of $2.5 million helped finance the Company's I r - 2 - original project which was undertaken in 1955 to meet the rapidly growing demand • for cement in northern Peru. A conventional wet-processing plant, producing some 110,000 metric tons per year of Portland cement, was completed in 1957 at a cost of about $5 million. Because of the growing demand for cement, both in the northern market and in the Peruvian market as a whale, Cementa Pacasmayo has decided to expand its produc- tion facilities. The project consists of conversion of the existing plant from wet to dry process, thereby effecting a substantial saving of fuel and increasing the clinker capacity of the present kiln; installation of an additional kiln; expansion of the Company's cement milling capacity; and installation of the power generating capacity required for the larger plant. • The expansion program is expected. to be completed by early 1966 and the plant will then have an annual capacity of 220,000 tons of cement. The Company will also be able to produce additional cement clinker so that, with a. relatively small addi- tional investment, it could expand its annual output to 300,000 tons of cement. The investment will be IFC's sixth in Peru and will bring the total of IFC's Peruvian commitments to $8.9 million. Moreover, it will be IFC's second invest- ment in the Peruvian cement industry. An investment of $2. 4 million in Cemento Andino S.A. was ma.de in 1961 for the purpose of helping Cemento Andino expand and modernize its cement plant in the centraJ. Peruvian Sierra east of Lima. f • [