IFC to invest upto $85 mn in SRF's foreign arms

Around $45 mn will be taken up by SRF's Thailand unit, rest goes to South African business

International Finance Corporation (IFC) is planning to invest around $45 million in SRF Industries (Thailand) Limited and another $40 million in SRF’s South African Business.

The proposed investment in the Thailand’s subsidiary is to support company's plan to set up a greenfield facility in Thailand at an investment of around $71 million. The new facility will manufacture bi-axially-oriented polyethylene terephthalate (BOPET).

According to SRF’s Project disclosure, the Plant will have a capacity of 28,500 tonnes per annum will be set-up in the SRF’s subsidiary SRF Industries (Thailand) Ltd (SRFIT).

The project cost is expected to be around $71 million including working capital requirements , of which IFC is considering financing up to $45 million. The balance will be financed by SRF and will raise debt.

IFC's has said that its global presence and expertise enables IFC to offer the sponsor advice and comfort, as SRF expands its footprint overseas. Besides, this project will be a part of IFC's endeavor to establish a long-term partnership with SRF. IFC is currently looking at another investment with SRF in South Africa, where IFC is requested to provide $40 million dollar denominated loan.

SRFIT has purchased 22 acres land at the Hemaraj Eastern Seaboard Industrial Estate (HESIE) around 30 kilometers from the Laem Chabang deep-sea container port and Sri Racha city and around 110 kilometers from Bangkok. The company has received approval from IEAT (Industrial Estate Authority of Thailand), covering various environmental and land clearances. Utilities and road infrastructure is part of the facilities available at the estate.

The project is expected to create about 300 direct jobs and 1,500 indirect jobs in ancillary units and supply chain. In addition, there will be temporary jobs created during construction phase and during life of the project.

Local procurement of about $10 million is expected during construction. During operational phase, business for local supply
chain will increase.

The Project supports the expansion of the food packaging industry, thereby reducing food spoilage and enhancing availability of processed foods.