Vestel 2 - White Goods Production

complete

The proposed project envisages provision of a long term debt financing to Vestel CIS to construct and operate a white goods (automatic washing machines and refrigerators) production facility. Construction will involve erection of a new production building, several auxiliary infrastructure buildings and warehouses, and two assembling lines for automatic washing machines and refrigerators. The new plant will have a total production capacity of 500,000 units of washing machines and refrigerators per year. This capacity will be increased to 1 mln units each, subject to the market demand. The plant will be located on the same site as the existing Vestel CIS’ TV plant in Alexandrov, Vladimir region of Russia. With its investment the Bank will support a committed strategic investor who has demonstrated its ability to successfully build and operate a modern TV sets production facility in a very competitive market. The Project will foster market efficiency and higher standards in the white goods industry as western quality products will become available at lower prices. This will prompt domestic producers to adapt to a more competitive market environment, it will also put pressure on new foreign entrants who are planning to set up local production in the near future. The Project will play a positive role in setting corporate governance and business standards in the industry which still has a large share of “grey imports”. The Company will follow best industry practices in terms of production facilities, quality control, distribution and marketing. Further positive impact will be achieved by widening the Vestel CIS’s product mix and transferring skills to local employees, who will be trained to operate and maintain modern production equipment, as well as will acquire skills and know-how in the areas of management, quality control and marketing. The Project is expected to promote development of supplier industries, such as domestic component manufacturing. Vestel CIS Ltd., a Russian company, the Bank’s existing client which owns and operates a television set production facility in Alexandrov. The Company is wholly-owned by Vestel Electronik Sanayi Ve Ticaret A.S., a leading Turkish integrated consumer electronics and white goods manufacturer. USD 28 million long term senior loan. Up to USD 80 million spread over several years. The project was screened B/0. The Environmental Analysis, which included a site visit by the Bank’s Environmental Specialist, confirmed that the Company’s operations are of the highest international standard and Vestel has developed a comprehensive environmental management system and capacity (ISO 14001) and management system for occupational health and safety (BS 8800). The facility has all necessary environmental permits in place; fire protection and fire control are of a high standard; there is no dangerous machinery or hazardous materials present, and all soldering machines have local exhaust ventilation in place. The environmental investigations also confirmed that a new wastewater treatment will be constructed and that the development of the white goods facility will be in accordance with both local/national legal requirements and good international/EU standards. None. Vestel CIS 16 Gagarina St., Alexandrov Russia General Director: Ali Tunc Can