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World Bank's IFC to step up role in cement sector after election

At a time when the Indian domestic financial intermediaries are shunning the cement sector, the International Finance Corporation, the World Bank group member, sees opportunity in the troubled sector.

IFC director for south and souteast Asia department, Rashad-Rudolf Kaldany, said that there was no policy obstacle for exposure to the cement industry.

With excess and fragmemted capacity, the Indian cement industry had been going through difficult times over the last few years. Many of the companies have restructured their operations while a few of the big units have changed hands.

IFC, unlike the domestic banks and institutions, does not want to wait for the restructuring to be over before making any more commitment. ''Instead, the restructuring of the cement provides us an opportunity,'' Kaldany said.

IFC's portfolio committed for the cement and construction materials was $ 687.9 million as on June 30, 1999. Since the private sector funding arm of the World Bank is placing a lot of emphasis on restructuring of corporations in Asia, it has initiated discussions with various Indian players, including FIs, for advising and participating in the revamp exercise.

IFC has already invested in three Indian cement companies -- Gujarat Ambuja, Prism and DLF.

Out of these, DLF is restructuring its finances and IFC, having invested $ 12.6 million, is involved in the exercise.

Out of the total planned inflows of about $ 100 to 150 million in 1999-2000, some of the money would be utilised in buying stake in the companies revamping their operations and finances, Kaldany said.

There is no cap on exposure to a particular industry as long as it makes commercial sense to invest into it. The IFC is waiting for installation of the next government after elections. The investment climate would improve after the new government clears policy problems in a few infrastructure sectors like telecom.

UNI

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