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New EBRD partnership funds joint ventures in important industrial and manufacturing sectors
A new ECU 150 million multi-project facility has been established by the European Bank for Reconstruction and Development (EBRD) in partnership with the Korean Samsung Group to invest in joint ventures in the EBRD's countries of operations (central and eastern Europe and the former Soviet Union) which will provide vital financial, commercial and industrial know-how to increasingly important industrial sectors.
"Given Samsung's hugely successful track record in many sectors, the EBRD not only has a highly experienced and effective financial partner, but a partner which can facilitate the transfer of commercial and operational practice and expertise to key companies in the region," noted Ron Freeman, First Vice President of the EBRD. "The EBRD and Samsung funds will be used to develop those companies' operational, financial and production performance as well as local and export sales networks for their products. The intention is also to improve the environmental standards of these companies."
The multi-project facility, which has been signed with two publicly listed Samsung companies, Samsung Electronics, Co., Ltd. and Samsung Corporation, will cover both equity and debt. Under the facility, the EBRD will be financing up to 35 per cent of the costs of each project undertaken. Total project costs are expected to be over ECU 320 million.
Cegill Shin, President of Samsung Europe, said: "Samsung is keen to invest in central and eastern Europe and has plans to become one of the region's leading companies by the beginning of the next century. This new facility will support our goals, since joint-venture companies will be in core sectors which have a wide impact on the local economies and where Samsung has built its international leadership position, such as electronics, home appliance and telecommunications equipment and manufacturing."
The majority of investments will be in joint ventures and existing companies although a few will be "green-field" operations. The Samsung sponsor will have operational control in all cases. Initial projects are currently being researched.
Samsung is one of the world's largest companies and aims to be one of the top ten by the year 2000. With a total global workforce of 233,000 and net sales in 1995 of US$ 87 billion, it has 28 businesses spread over four core trading sectors: electronics, machinery, chemicals, and finance and insurance. Revenue has tripled since 1987. Samsung is the world's leading manufacturer of memory products and is the largest manufacturer of PC monitors (17 per cent market share), microwave ovens (18 per cent), VCRs (11 per cent) and colour picture tubes (17 per cent).
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