Fabrinet

completed

The proposed project consists of upgrading the technology and expanding the production lines of Fabrinet. Established in August 1999 as a spin-off from Seagate, the company became operational in January 2000. Fabrinet is a provider of contract assembly services and specializes in the production of components for two main customer segments: magnetic memory mass storage, and optical devices. The project will enable the company to: service higher technology requirements for its customers; generate additional programs from its customers; and support for increasing orders from existing and new optical component customers.Development ImpactThe project is expected to bring about significant benefits to consumers by improving the quality, reliability, and cost structure of the end-product into which the Fabrinet''s output is assembled;The proposed transaction is IFC''s first re-engagement in Thailand''s manufacturing sector after several years of cautiously watching the overall developments in the country; andThe project is expected to demonstrate that IFC remains a viable source of long-term financing in Thailand for corporates with good management and solid business fundamentals.IFC''s RoleIFC will provide long-term foreign currency financing which is not available to the company in the local market. IFC''s long-term financing will enable better matching of cash flows, generated from the investment project, with the debt service obligations. IFC''s investment will allow the company to acquire the necessary technology to remain competitive and retain and expand its customer linkages; andIFC''s investment supports a high profile provider of electronic manufacturing services which is also a key producer in the supply chain of Thailand''s computer hard disk drive manufacturers. Overall, the electronic manufacturing services sector in Thailand has been an important engine for economic growth for the past decade and, in recent years, computer hard disk drives have consistently represented around 10% of Thailand''s total annual exports.