Announcement of IFC Investment in Enka de Colombia, S.A., Colombia on September 23, 1966

.NTERNATIONAL FINANCE CORPORATION 1818 H STREE·T, N.W., WASHINGTON D. C. 20433 TELEPHONE: EXECUTIVE 3-6360 IFC Press Release No. 66/15 Sub,ject: IFC Investment· in Enka de For Release AM Newspapers Colombia, S.A., Colombia Friday, September 23, 1966 An investment commitment of approximately $937,500 is announced by the Inter- national Finance Corporation (IFC), an affiliate or the World Bank, in Enka de Colombia, S.A. which is building a synthetic fiber plant near Medellin, Colombia. Enka de Colombia was formed il'l' 1964 by the Ibtch firm, Algemene Kunstzijde Unie (AKU), together with a group of local investors which included six Medellin tex- tile firms and the Corporacion Financiera l'lacional ( CFN), a. Colombian dev~lopment finance company (financiera) in which IFC is a shareholder. The plant will have a ~ capacity to produce 4,200 tons of nylon and polyester annually. The proceeds of the IFC subscription to the stock of the company wi~l be used to help finance facilities bein~added to the plant for converting nylon tire yarn into canvas. ,:,,. AKU, the main ~onsor and technical partner, is one of the world's largest ,I - ,1 ' manufacturers and exporters of s~nthetic fibers, with major plants in Holland, Germany, Austria and the U.S. In recent years the company has also been active in forming manufacturing units, in association with local investors, in Ireland, Spain, Mexico and Italy. Enka de Colombia represents AKU 1 s first such plant in South America. When fully '?Perational early next year the Enka de Colombia plant will be the largest synthetic fiber plant in Colombia and the only Colombian producer of nylon tire yarn; its other products being nylon textile yarn, polyester yarn and • \ fiber. polyester staple1 Manufacture or synthetic fibers, which is still a com- paratively new industry for Colombia, promises to save the country about $8 million  - 2 - a year in foreign exchange, largely by the replacement of imports of similar fibers • and wool. Enka de Colombia is expected to account for about half this saving. Enka de Colombia's initial capit#il was Col$100 million of which AKU sub- scribed somewhat more than half. The Medellin textile companies and CFN, later joined by the Corporacion Financiera de Caldas, another Colombian financiera in which IFC is a shareholder~, provided the balance. Loans to the company are being provided by the Inter-American Development 'Bank, which has agreed to lend the equiv- alent of $5.5 million, and by Colombian £inancial institutions. The IFC investment takes the form of a purchase at par (Col$10) of 1,500,000 new· shares of common stock and will give the Corporation 13 per cent of the new· share capital of Co1$115 million, the same percentage as the financieras. • •