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| This Summary of Project Information is prepared and distributed to the public in advance of the IFC Board of Directors’ consideration of the proposed transaction. Its purpose is to enhance the transparency of IFC’s activities, and this document should not be construed as presuming the outcome of the Board decision. |
Summary of Project Information (SPI) |
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| Project number | 11670 |
| Project name | Dewan Salman Fibre Limited |
| Country | Pakistan |
| Sector | Textiles, Apparel & Leather |
| Department | Global Manufacturing & Services |
| Company name | Dewan Salman Fibres Limited |
| Environmental category | B |
| Date SPI disclosed | September 3, 2002 |
| Projected board date | October 4, 2002 |
| Status | Active |
| Previous Events | Invested: January 15, 2003
Signed: November 18, 2002
Approved: November 14, 2002 |
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| Project sponsor and major shareholders of project company |
| The project sponsor, Dewan Mushtaq Group, is one of Pakistan's largest conglomerates with a long-established credibility in the local industrial and banking community. The project company (DSFL, "the company") is publicly listed and 51% owned by the Dewan Mushtaq Group. Mitsubishi Corporation and Samyang Corporation (Korea) each hold a 11% equity share in the company. The remaining shareholding is held by institutions and the general public. |
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| Total project cost and proposed IFC investment |
| The total project cost is estimated at US$66 million. The proposed IFC investment consists of a loan of up to US$30 million for IFC's own account and an equity investment of up to US$2 million by participation in the proposed preferred shares issue of the company. |
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| Location of project and description of site |
| The specialty fiber manufacturing project will be adjacent to the company's existing production facilities at Dewan Farooque Industrial Park in Hattar, which is located at about 70 kilometers from Islamabad in the North West Frontier Province. |
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| Description of company and purpose of project |
The company is Pakistan's largest producer of polyester fiber and sole producer of acrylic fiber. It started operations in 1992 and diversified into acrylic fiber manufacturing in 2000. DSFL is the flagship company of Dewan Mushtaq Group, with a strong customer base, competent management and a dedicated work force.
The project involves the company's expansion into specialty fiber manufacturing, and the refinancing of existing long-term debt together with financing for long-term working capital requirements. The project's development impact is expected to be significant as it will enhance the long-term sustainability of one of Pakistan's largest private sector groups providing a key input to the textiles industry, which is the country's most important industrial sector and major foreign exchange earner (about 60% of total exports). In addition to providing direct employment, the project will also support indirect employment by enhancing the viability of downstream textiles customers and local suppliers.
IFC's role in this transaction is to assist the company in stretching the maturity of its long-term debt to match its future cashflows. The financing will improve the company's financial structure, reduce the financial costs, support long-term working capital and boost the resources available to finance the expansion into the new specialty fiber project. IFC's presence in this transaction will enhance the local confidence and signal international support for financing of the local corporate sector despite difficult regional conditions. |
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| Environmental and social issues - Category B |
This is a Category B project according to IFC’s Procedure for Environmental and Social Review of Projects, because a limited number of specific environmental and/or social impacts may result which, can be avoided or mitigated by adhering to generally recognized performance standards, guidelines or design criteria.
To view the environmental documents for this project, click here
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| Location of environmental documents in locally affected community |
| The environmental documents will be held at DSFL's offices in Islamabad, Karachi and Lahore. |
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| To contact the project company, please write to: |
Mr. Dewan Zia ur Rehman Farooqui, Chief Executive Officer
Dewan House, 46 Nazimuddin Road,
F-7/4 Islamabad, Pakistan.
Ph: 92 51 111 313 786
Fax: 92 51 227 6535
or
K. Aftab Ahmed, Senior Investment Officer
email: kaahmed@ifc.org
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