•   International Finance Corporation                             1818 H Street NW
                                                                  Washington. D.C 20433. U.S.A
                                                                  202·393-6360




    IFC Press Release No. 79/3
    Thursday, July 20, 1978


                              IFC, Yugoslavs, Austrians j'oin
                             In Second Tire Expansion Project


         The International Finance Corporation (IFC) and Yugoslav and Austrian
    sponsors are joining for the second time to finance a further, $41.9 million
    expansion and modernization of a joint-venture tire manufacturing enterprise
    in Yugoslavia.
         The investm~nt is being made in Tovarna Avtopnevrnatike SAVA-SEMPERIT, of
    Kranj, Slovenia, to expand tire production capacity to 36,300 metric tons a
    year by the end of 1980 from the 28,100 tons at present, and to increase pro-
    ductivity through modernization and better utilization of existing facilities.



•        The Yugoslav sponsor, SAVA, Industrija Gumijevih in Kemicnih Izdelkov, is
    one of Yugoslavia's leading motor vehicle tires and rubber products producers.
    It will invest $3.8 million in equity.     IFC is investing $2 million.
         Loan financing is being provided by Ljubljanska Banka, a major Yugoslav
    bank, $10.7 million; Semperit A.G., Vienna, the joint venture technical partner
    and the largest manufacturer of tires and rubber goods in Austria, $5.6 millipn;
    and IFC, $7.3 million.   Suppliers' credits of $2.7 million and $9.8 million in
    internal company resources, complete the financial plan.
         All of the added capacity will be for radial tires and is intended, primarily,
    to meet growing domestic demand and, secondarily, to enable SAVA-SEMPERIT to main-
    tain its position in export markets.     The project will generate estimated net
    foreign exchange benefits of $15 million a year.
         SAVA and IFC first joined in 1972 in an approximately $25 million project
    to increase the joint-venture company's tire manufacturing capacity and to intro-
    duce new technology for the production of radial tires.     The second project is
    in keeping with the continued growth of Yugoslavia's automotive industry and is
    a logical step in the development of the internationally competitive tire sector



•   of the industry •

    (Any inquiries strictly relating to IFC's participation in this project should
     be directed to the IFC Information Office, 1818 H Street, N.W., Washington,
     D.C. 20433, Telephone (202) 477-5340.)