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IFCs $12 million loan in 2003 helped RAK finance its US$25 million
two-phase project to expand its existing ceramic tiles factory in
Bangladesh and build a new sanitaryware plant at the same factory,
drawing on the countrys advantages of low cost labor and plentiful
natural gas. The expanded production supplied the growing
domestic market and also positioned Bangladesh as a significant
exporterd of ceramic tiles and sanitaryware.
Now fully repaid, the loan has helped establish RAK Bangladesh as
the countrys market leader in terms of both quality and quantity,
meeting 50 percent of the demand for sanitaryware and 30 percent
of demand for ceramic tiles. This Bangladesh-UAE joint venture is
now entering a new phase, with plans to issue 34.5 million shares in
an initial public offering and list on the Bangladesh stock exchange
in 2010.
In addition to the financial success of the Bangladesh facility, IFCs involvement helped RAK improve the environmental
performance of this plant and work towards setting up a company-wide environmental management system.
IFCs partnership with RAK extends beyond Bangladesh to China and India, where IFC has provided US$40 million of
financing to support RAKs expansion into these countries.
Quantifying Results: Report Card Demonstrates Strong Economic and Development Returns
A recent assessment looked at the performance of IFCs investment in RAKs Bangladesh project . Here are some highlights:
Loan fully repaid on schedule by June 2009
RAK products perceived as superior quality at affordable prices; competitive with low cost Chinese products
Stable real estate sector and expected 5 percent GDP growth leads to continuing domestic demand for ceramic
tiles and sanitary ware: developers took on more projects as the price of tiles, sanitaryware and other construction
materials has decreased
RAK plants operating at over 100% capacity
Improved environmental and safety performance in terms of reduced pollution and increased worker safety
A clear demonstration case for international FDI.
For more information about IFCs financial products and advisory services in the ceramics sector, please contact:
Eric Siew 1-202-458-9625 or esiew@ifc.org, Georges Zahar 1-202-473-7098 or gzahar@ifc.org