Announcement of IFC Investment in Industria Oanadera Colombiana, S.A. (INDUGAN), Colombia on July 14, 1966

.INTERN AT ION AL FINANCE CORPORA.TION 1818 H s·rREE·T,c'N.W., WASHINGTON D. C. 20433 TELEPHONE: EXECUTIVE 3-6360 I,FC Press · Release ,'t{o. 66/11 Sub.1ect: IFC Investment in Industria For Release AM Newspapers Oanadera Colombiana, s.A. Thursday., Jucy 14., 1966 (INDUGAN), Colombia The International Finance Corporation (IFC)~ aa. affiliate of. the World Bank., an- nounced that it is mald.ng an investment in Colombia of approximately $1.6 million in Indu.stria Ganadera Colombiana, s.A. (INDUGAN) to help tinar..4'e a major erpansion of the c9tnPany 1 s li~stock and meat program. IFC 1 s financing, together with ad- ditional funds from present shareholders, will perm:f:+··. the company to increase. greatly· its production of' beet cattle and to begin a meat marketing program, ,: and thereby will increase activity in one of the most ~portant sectors of the Colom- • bian econOl1t'{e INDUG.AN was established in 1961. At the beginning of its .operations., INWGAN -went into the cattle-fattening business, on the basis of a cattle-in-partnership system which ha~ been practiced in Colombia for many years. This system is based on a profit sharing agreement between two parties, on.e of whom contributes young steers while the other supplies pasture and tends the cattle while they mature and fatten. INOOGAN's cattle are now· concentrated in the upper and central valley ot the Magdalena River and the lowland plains east ot Bogota. INIXJGAN 1 s expansion program v.ill aim to increase the supply of quality meat in the Bogota area,·and inclut~s the lease of a modern slaughterhouse at Bogota. Colombia's livestock industry, in which the production of beef cattle is the major element, accounts f'or about one-third ot all agricultural production and about 10 per cent of' the entire national product. Colombia's large areas of grass- • lands give scope tor a substantial increase in cattle-raising and tor continuing  inprovement in the quality ot stock. -2- INIJJ~AN will ,\ ,;) encourage . ranchers to iq,rove their cattle breeding and fattening practices and their pastures. 'lbe Government • or Colombia recognizes the importance and potential ot the beef industry,. and is taking a number or measures t,o support it, including the operation or a ,credit program tor ranch improvements, financed with the help of a recently approved loan of $16e7 million from the World~. 'lbe total cost or IN1lJOAN 1 s pr.ogram is estitnated at t~e equivalent of $7.S million. IFC 's investment in INDUOAN will strengthen the canpany I s financial · structure by providing financing tor the long-range expansion p:r.ogrGJn, and will consiL~t ot a nine-year loan or $1 million and the purchase at a cost of approxi- mately $620,000 of 1,000,000 new· shares of the company. The present shareholders will subscribe to an equal amount of new· stock. Following the i9sue ot new· stock, IFC 'will OWll about 20 per cent of the shares. The remainder ot the company's nseds. will be met by cashgenerati~, from operations and by short-term loans from Colom- bian sources. The principal shareholders ot the comparJ1' are a number of leading ranchers of Colombia; Corporacion F:lnanciera Colombiana of Bogota, a privately owned developrnent finance conpany in which IFC is a shareholder; Bavaria, S.A., a major industrial enterprise with diversified interests, whose shares are widely held by Colombian investors; Compania Colombiana de Seguros and a number of other insurance companies; and Inversiones Esso de Colombia, S.A., a Colombian investment conpany affiliated with a subsidiary at the Standard Oil Company ot New Jersey. •