Summary of Proposed Investment
Project Number
7544
Company Name
Cifunsa, S.A. de C.V.
Date SPI Disclosed
Apr 19, 1996
Country
Mexico
Industry
Manufacturing
Status
Completed
Sector
Iron and Steel Foundries/Castings
Department
Regional Industry MAS LAC & EUR
Environmental Category
B - Limited
Previous Events
Approved : Dec 6, 1996
Signed : Jul 24, 1997
Invested : Jul 31, 1997
Project Description
Summary Of Project Information (SPI)
| Project Name | Mexico-Cifunsa, S.A. de C.V. - Diesel Project |
| Region | Latin America and Caribbean |
| Sector |
Projected Board DateJuly 1, 1996
Company NameCifunsa, S.A. de C.V. (“Cifunsa”)
Technical Partner and/or Major Shareholders
Cifunsa is 100%-owned by Grupo Industrial Saltillo, S.A. de C.V., (“GIS”) a diversified Mexican company engaged in the manufacture of specialized automotive castings, ceramics, cookware, and tableware. GIS’s shares are owned 85% by the Group’s original founders, the López family of Saltillo, while the remaining 15% are held by the general public and are traded on the Mexican stock exchange.
Project Cost Including proposed IFC investment
US$65 million, of which IFC’s proposed investment is US$45 million (US$20 million “A” loan, US$20 million “B” loan, US$5 million “C” loan.)
Location of project and Description of site
Saltillo, State of Coahuila, Mexico. The site is located in an industrial corridor on the northern side of the city.
Description of Company and Purpose of Project
Cifunsa is the leading Mexican producer of cast iron engine blocks and cylinder heads for the North American automotive industry. The Company’s expansion program which will allow it to both diversify its engine component manufacturing operations through entry into the diesel engine market for agricultural and commercial vehicles as well as reduce its operating costs. Cifunsa’s expansion project will involve the installation of (i) a production line dedicated to the manufacture of engine blocks and cylinder heads for the North American diesel engine market; and (ii) a sand reclamation facility to enable the recycling of sand used in the process of molding engine blocks. IFC’s financing provides Cifunsa with long-term financing which is not available from other sources for second-tier Mexican companies, and is part of IFC’s strategy of assisting medium-sized Mexican companies with strong exports and growth potential. IFC’s continued involvement with Cifunsa helps to pave the way for a planned ADR issue by GIS, and generates much needed foreign exchange and employment for Mexico.
Environmental Category and Issues
This is a category “B” project according to IFC’s environmental review procedure. Environmental issues associated with this project include: air emissions; liquid effluents; solid waste disposal; employee exposure to dust, molten metal, and noise. The new facilities will be installed in existing industrial sites. A detailed environmental audit of the Company’s three factories in the Saltillo area was carried out in 1994 as part of an earlier IFC investment, and a number of deficiencies were identified. The Company provided IFC with a Corrective Action Plan, which included plans to close Plant 1, the oldest plant, by the end of 1996. Cifunsa committed to implement the Corrective Action Plan as part of the Investment Agreement dated July 21, 1995. Appraisal of the new investment will include a detailed review of progress made to date in this area.
The is June 15, 1996 from the Public Information Center.
| Date SPI sent to PIC | April 19, 1996 |
For Additional Information contact: Corporate Relations Unit -
telephone: (202) 473-7711
facsimile: (202) 676-0365
Environmental documents for this project are available at http://www.ifc.org and from the World Bank InfoShop (http://www.worldbank.org/html/pic/aboutinfo.html).
Sponsor / Cost / Location
Related ESRS/ERS
