25946 - K.C. Textiles

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Summary of Proposed Investment

Project Number

25946

Company Name

KUCUKCALIK TEKSTIL SANAYII VE TICARET ANONIM SIRKETI

Date SPI Disclosed

Apr 27, 2007

Country

Turkiye

Industry

Manufacturing

Projected Board Date

May 29, 2007

Status

Completed

Sector

Household Textile Products (Including Drapes, Mattress Covers, Carpets, Towels, etc.)

Department

Gbl Ind, Manufact, Agribus & Services

Environmental Category

B - Limited

Previous Events

Approved : Jun 6, 2007
Signed : Jun 13, 2007
Invested : Aug 30, 2007

Project Description

Küçükçalik Textil San. ve Tic. A.Ş. (Kucukcalik or the company), a Turkish manufacturer and exporter of home textiles, plans to implement:

- a green-field investment to build spinning, weaving and embroidering facilities in the 10th of Ramadan Industrial City, Egypt; and
- modernization and capacity expansion of the company’s existing facilities, along with providing working capital to its existing plants in Inegöl-Bursa, Turkey.

Sponsor / Cost / Location

Product Line	IFC Investment (million USD)
Risk Management
Guarantee
Loan	24.0
Equity

Development Impact

The proposed project presents the following positive developmental impacts:

- South-to-South Expansion:

The project will allow Kucukcalik to set up an operation in Egypt, which supports expansion/re-location of manufacturing capacities to a more cost-competitive environment. The investment in Egypt will reduce the overall manufacturing cost of the group and improve its access to its traditional markets.

- Improving Sustainability:

The project is expected to improve the overall competitiveness of the company and hence its financial sustainability.

- Employment:

The project will create about 1,000 new jobs (900 in Egypt and 100 in Turkey), which will benefit the local economies of both countries.

- Transfer of Technology and Know-How:

The project is expected to use the latest state of the art technology and would require significant training of the Egyptian work-force.

Long-Term Financing:

IFC financing has a longer-tenor than the one currently available in Turkey.

Global Expertise:

IFC is providing its global knowledge on the sector, technical and financial expertise to help the company improve its operational efficiency.

Environmental and Social Aspects:

IFC’s environmental and social knowledge will help the company consolidate and improve its environmental and social management to the internationally acceptable level.

Corporate Governance:

IFC will contribute with its global knowledge on the best practice of corporate governance, which will allow the company to increase its transparency and to increase operational efficiency for further growth in the future.

Key environmental and social issues in a project of this nature are the company’s capacity to manage social and environmental issues, including environmental assessment and planning in Egypt, the provision of a fair and safe workplace, control of hazardous materials and emissions to water and air, including of greenhouse gas emissions and waste management.

The potential adverse effects of the project would be limited, site specific, reversible and can be readily mitigated. It is therefore concluded that this is an Environmental Category B project according to IFC’s Environmental and Social Review Procedure.

Contacts

For Inquiries About the Project, Contact

Olcay Kinalikaya, Coordinator
Gurcan Cad. Merter is Merkezi No. 2 Kat:9 Meter
Istanbul, Turkey

Telephone: 90-212-481-8085
Fax: 90-212-481-5763
E-mail: olcay@kcalik.com

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This Summary of Proposed Investment is prepared and distributed to the public in advance of the IFC Board of Directors' consideration of the proposed transaction. It is not an offer of shares to the public and is intended solely to enhance the transparency of IFC’s activities. This document should not be construed as presuming the outcome of the Board decision. Board dates are estimates only. The following SPI is disclosed in accordance with IFC’s Policy on Disclosure of Information that went into effect April 30, 2006.

The map is for illustrative purposes and does not imply the expression of any opinion on the part of the World Bank, concerning the legal status of any country or territory or concerning the delimitation of frontiers or boundaries. Country borders or names do not necessarily reflect the World Bank Group's official position. In some cases, available project location information is limited to the country of the project's activities. Locations are approximate.

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