IFC gives US$9.5m loan to South Pacific Viscose

The Jakarta Post, Jakarta

The International Finance Corporation (IFC), the private arm of the World Bank Group, has signed a US$9.5 million loan agreement with viscose staple fiber producer PT South Pacific Viscose (SPV) to finance the latter's two-year capital investment plan.

The IFC said in a statement that SPV would use the loan to achieve self-sufficiency in electricity, to modernize its production facilities to refinance its medium-term debt.

SPV operates one of the largest viscose staple fiber plants in the world near Purawakarta, about 150 kilometers east of Jakarta. It is a major supplier to the domestic and regional textile sector with production equal to 7 percent to 8 percent of the world's consumption.

It is 42 percent owned by Lenzig AG of Austria, which is the world's second largest producer of viscose staple fiber.

Viscose staple fiber, made of natural cellulose, is also known in the textile industry as "artificial cotton".

IFC said it had worked with SPV since 1992. It financed the company's two recent expansions and led its financial rescheduling in 2000.