Arcelik Expansion

completed

Summary Of Project Information (SPI)Project NameTurkey-Arçelik Expansion Program     RegionEuropeSectorProject No007321Projected Board DateMay 31, 1996Company NameArçelik A.STechnical Partner and/or Major Shareholders Koç Group is the major shareholder of Arçelik.Project Cost Including proposed IFC investment US$230 million, including an IFC A Loan of US$40 million and a B Loan of US$40 millionLocation of project and Description of site The refrigerator plant is located in Eskisehir, and the washing machine plant is located in Çayirova. Both towns are in north-west Turkey. The refrigerator plant was constructed in 1975 and has a current capacity of 840,000 units a year. The washing machine plant was also built in 1975 and has an existing capacity of 900,000 unit a year.Description of Company and Purpose of Project Due to Turkey’s recent and on-going financial problems, international institutions are unwilling to provide the long-term financing required for this project. Even the strongest of Turkish companies, such as the Koç Group, are unable under the present conditions to raise the necessary financing for large projects without the substantial support and commitment of IFC. Arçelik is the largest private sector company in Turkey and one of the six largest European manufacturers of white goods. The project consists of investments to improve productivity and product range in the Eskisehir refrigerator plant (US$122 million) and the Çayirova washing machine plant (US$28 million), as well as provide financing for the company’s modernization program and incremental working capital needs for years 1996/97 (US$80 million).Environmental Category and Issues This is an environmental review category B project. Environmental, health and safety issues include air emissions, liquid effluents, spill prevention, solid and liquid waste management, noise, fire safety and worker safety. Arçelik is conducting a group-wide program to upgrade its hazardous waste management practices. The company is also implementing a program to replace chlorofluorocarbon (CFC) based compressor technology and foam insulation blowing agent with more environmentally friendly media, and has produced CFC-free refrigerators since November 1994.The is from the Public Information Center. Date SPI sent to PIC      April 24, 1996For Additional Information contact: Corporate Relations Unit -telephone: (202) 473-7711facsimile: (202) 676-0365Environmental 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).