Manufacturing Industries and Services
DEG as a long-term partner of the Indonesian Indorama Group
DEG has been supporting and financing Indorama's development for over 15 years. With its first DEG loan, what was then a young company was able to boost the capacity of its spinning mills and diversify production. As a result, Indorama was in a position to move the preceding production step, polyester fiber production, in house - an important prerequisite if the group was to become a competitive supplier of high quality products in the international markets. Over the next few years, no additional DEG finance was required, as the necessary loans were granted by commercial banks. However, this changed drastically during the Asia crisis of the mid-1990s, when longterm investment capital dried up almost completely, even for well-run companies. At the height of the crisis, DEG made a conscious decision to provide a second, enabling the group to finance the construction of a new plant in Indonesia to produce sewing yarn. In 2003, a further long-term loan was used to finance expansion investment costs.
The benefits to the investment country are considerable. In Indonesia alone, Indorama employs 7,400 people, while another 5,000 secondary jobs at suppliers and service companies depend on the group. Training and retraining measures are better than average, the fringe benefits for both male and female employees and the group's manifest social commitment are regarded as exemplary. Other positive outcomes include tax payments, value creation, and net foreign currency earnings running into eight figures.
DEG also supported Indorama when the group went international. In Turkey, for example, DEG provided a long-term loan to finance part of the investment costs for a joint venture involving the Indonesian group and a Turkish textile manufacturer.
Loan for a German construction material producer in Russia
A subsidiary of the German enterprise MC Bauchemie has set up a new production facility for building products in Russia. In addition to its standard products, MC Bauchemie has developed innovative system solutions, which have made it one of the technology leaders in the field of additives for mortar and concrete, building maintenance and modern waterproofing of buildings. Within a short period, the subsidiary has developed into one of the largest Russian manufacturers of cement-based mortars. In order to meet the growth-related demands made on the production - larger capacities, economical structures and modern technology - several different production facilities that were scattered about the St. Petersburg area were incorporated into an enlarged central plant in the industrial area of Kirovsk. DEG advised the enterprise on the planning and has been financing the investments with a long-term loan.
DEG finances Chinese subsidiary of Ludwig Krohne GmbH & Co. KG
Ludwig Krohne GmbH & Co. KG is one of the leading manufacturers of instruments and meters for level, flow and mass measurement. The medium-sized enterprise is investing in setting up a wholly-owned subsidiary in Shanghai. The new works will manufacture a new generation of electromagnetic and ultrasonic flow meters for the local market and for export in the region. As part of a PPP project, in-house and supplier personnel are given regular training. Via ongoing technology and know-how transfer, this will maintain high quality standards. DEG has provided a long-term loan for this investment project.
