FV Argentina II

completed

FV, an IFC’s investee since 1998, is Argentina''s leading producer of brass and metal fixtures for bathrooms and kitchens. FV has approached IFC to request further support for the company’s 2008-2010 strategic investment program. The investment program for the next two to three years, would mainly comprise investments to: - expand, upgrade and maintain its production facilities in Argentina (Villa Rosa in the Municipality of Pilar, Buenos Aires province, and Florida, just outside of Buenos Aires); - acquire and modernize small companies in Argentina with operations in complementary sub-sectors; - support the development of some of some of its key suppliers that would need to grow with the company; - expand its export base to further increase its presence in some Latin American countries (i.e. Uruguay, Paraguay, Mexico); and -finance additional working capital needs to support its growth. The investment program would be financed by the IFC Loan (up to $20 million) and FV’s internal cash generation. The key component of the proposed project is the rationalization and upgrade of the production process at Villa Rosa plant, which will increase its production capacity, expand its covered surface and to which most of current mold production and maintenance, and plastic injection molding, currently conducted at Florida plant, will be transferred. New automatic milling machines will be installed. The semi-finished product line will be moved to a new hall and the electroplating process line will be expanded and upgraded with a new automatic unit and decommissioning of the existing semi-automatic unit for chroming of plastic pieces. The pressing section will be upgraded and its capacity expanded. The furnace section will also be modernized and a new induction furnace will be installed, to complement the existing ones, and the existing crucible furnaces will be phased out and replaced with automatic tilting furnaces. The modernization project will have a positive impact on environmental control, especially reducing the emissions to atmosphere, and on workplace conditions, especially improving fume control and reducing exposure risks.