IIC Approves Up To US$6 Million In Financing For Compañía Ecuatoriana Del Caucho S.A. In Ecuador
09/17/2007The company will use the funds for fixed asset investments and working capital
Washington, D.C. - On September 18, 2007, the Inter-American Investment Corporation (IIC) approved a loan of up to US$6 million to Compañía Ecuatoriana del Caucho S.A. (ERCO) for purchasing machinery and equipment and for financing working capital.
The IIC loan will enable the company to improve its environmental management by including a tranche for financing investments such as a water treatment plant and improvements in ambient air quality at its production facilities. This second tranche will have a longer payment term of six years, than the bulk of the loan. IIC expects that the increased production volume resulting from investments under the project will increase the demand for natural rubber in Ecuador.
ERCO produces and sells Continental and General Tire brand tires for automobiles, light trucks, and trucks. It has a 43% share of the market in Ecuador and exports 35% of its production, chiefly to nations in the Andean region.
According to IIC Investment Officer Javier Hernández, "financing from the IIC will increase the company’s operating efficiency and help make its production line more flexible. The loan will have significant developmental impact by increasing the production of domestic tires in the face of imports."
ERCO is the only tire manufacturer in Ecuador and is a significant source of jobs and foreign exchange. Its operating history in Ecuador dates back to the 60s.
The Inter-American Investment Corporation is a multilateral financial institution that is a member of the Inter-American Development Bank (IDB) Group. It provides financing (in the form of equity investments, loans, guarantees, and other instruments) and advisory services to private enterprises in Latin America and the Caribbean. The IIC’s mission is to promote the economic development of its regional member countries by encouraging the establishment, expansion, and modernization of private enterprises, particularly those that are small and medium in size. For more information on the IIC’s activities, please visit www.iic.int.
Contact: John Beckham/Javier Hermández-Fuentes
Telephone: (202) 623-3984