Since its inception, IFC's cumulative commitments in the Steel /Primary metals sector has been close to US$2 billion, comprising 148 projects with an average unit investment size of US$13.2 million; the largest investment to date being US$100 million. As of September 2005, the sector exposure was US$ 420 million. IFC’s approach has been careful due to cyclical overcapacity in the steel industry. Our target is:
- selective investments based on the industry cost curve
- supporting the industry shift towards highly efficient production platforms
- downstream steel transformation sub sector, such as pipes mills and galvanizing lines
The sector team is also interested in supporting downstream non-ferrous metals projects, such as aluminum and copper casting and rolling projects.
Subsector Categories:
Examples of IFC investments:
- PSL Limited (India): In 2006, IFC provided a $20 million financing package (loan and equity) to India’s steel pipe maker PSL Limited. The financing will support the expansion of PSL’s production capacity from 675,000 tonnes to 1,425,000 tonnes per year to meet a rapid increase in domestic and international demand for large-diameter steel piping for use in oil, gas, and water applications.
- Tata Iron and Steel Company Limited (India): In 2005, IFC provided a $400 million financing package, which included a syndicated loan of $300 million to Tata Iron and Steel Company Limited. IFC’s financing supports the company’s modernization and expansion program, including a capacity increase in its plant in Jamshedpur in Jharkhand state, India.
- Borusan Holding (Turkey): In 2004, IFC provided a $40 million loan to Borusan Holding. The IFC financing was used to implement a number of quality control initiatives. The company represents the flagship of operating companies in the pipe segment, distribution, high value added steel manufacture, logistics services, and technology sectors.
- Stomana Industry AD (Bulgaria): In 2003, IFC invested US$22 million to support the refurbishment and modernization of Stomana Industry AD, the second largest steel producer in Bulgaria. The IFC loan complemented additional investments in Stomana Industry by Sidenor, the leading producer and marketer of steel products in Greece.
- Assan Demir (Turkey): In 2001, IFC provided a US$ 25 million loan to Assan Demir, a leading Turkish producer and exporter of aluminum foil and coil/sheet products. IFC’s investment supported Assan's efforts to achieve greater casting speed and flexibility in its production cycle, improve margins, and decrease conversion costs.
