Randon S.A. Implementos e Participacoes

completed

The Randon Group (the Randon Group) is a medium-sized Brazilian industrial group and a good existing IFC client. The Randon Group is Brazil’s leading producer of trailers mainly for trucks and rail transportation, and it also manufactures automotive components, including friction materials for brakes. The Randon Group is headquartered in Caxias do Sul, a city 120 miles north of Porto Alegre. The Randon Group has approached IFC with a request for financing of an investment program that will expand and modernize the production capacity of its operations. The project will be implemented during 2005-2009, and its cost is approximately $350 million. The project has the following components:- the expansion and modernization of trailer and wagon manufacturing production capacity ($153 million); - the expansion and technology upgrade of automotive component production facilities ($132 million); and - working capital requirements for continuing growth (US$65 million). This investment program is part of the Randon Group’s long-term strategy to further consolidate its leading position in the domestic market and to strengthen its competitiveness in the global market. IFC has been requested to provide loans of up to $35 million for two specific project items to be carried out by IFC’s existing borrowers as follows:- up to $25 million to Randon S.A. Implementos e Participações (Randon) for the installation of an electrostatic and water-based painting line, which will replace the existing painting processes with state-of-the-art technology to reduce the air and water effluents, improve the product quality and achieve cost savings; and- up to $10 million to Fras-le S.A. (Fras-le) for the expansion of brake pad manufacturing capacity to supply a new order from DaimlerChrysler.