Loans approved for Ecuadorian private sector

The Andean Development Corporation (CAF) approved long-term corporate loans totaling US$27 million in favor of the Ecuadorian private sector. The total covers US$12 million for Nirsa, US$5 million for Novopan, and US$10 million for Pronaca.

CAF President & CEO Enrique García said that these operations were in line with CAF’s institutional objectives, which include strengthening the private sector as fundamental actor in sustainable development, promoting the productivity and competitiveness of companies in the region and Latin America. The Corporation provides medium- and long-term finance to competitive companies to increase their production capacity, which generates new jobs and foreign exchange for the country by increasing private-sector exports.

Novopan Ecuador

The first operation was the approval of a US$5-million long-term corporate loan to finance the construction, equipment and start-up of a new chipboard production plant.

Novopan, which began operations in 1979, manufactures, markets locally and exports chipboard panels and accessories. The company has 1,400 hectares of reforested areas, a processing plant, 22 distribution centers and franchises, and a subsidiary in Peru.

Novopan is one of leading companies in the wood products sector. It is vertically integrated, which facilitates quality control during the production process. The company currently exports to Colombia and Peru.

With the investment financed by CAF funds, Novopan will open a new plant to increase its production capacity to cover demand from the export market and improve its competitive conditions for the signing of the Free Trade Agreement. The new plant is planned to start production in 2007.

García said that the transaction was also important because it was co-financed with Banco de Pichincha.

NIRSA

Additionally US$12 million was approved to finance investments in fixed assets and working capital in NIRSA, which is considered the leader in the industrialized fisheries sector in Ecuador. The company is fully integrated, which facilitates quality control and economies of scale, with a clear growth strategy, differentiated products and positioning on local and export markets.

Nirsa is another of the companies that are preparing to enter the US market in the framework of the FTA. In this respect the investments will strengthen and improve productive capacity.

PRONACA

The Pronaca company received US$10 million to finance working capital and the expansion of the plant for its lines of consumer-ready products.

The Pronaca group is the leader in the food industry in Ecuador. The company produces, processes and markets sausage, canned goods, meat and animal nutrition products, as well as products from agroindustry (heart of palm - palmito) and aquaculture (tilapia) for local and export markets. It participates in most stages of the meat industry and distributes a wide range of food and canned goods. It also possesses state-of-the-art technology that optimizes processes with effective results on productivity, efficiency and profitability. Pronaca is currently in full process of regional expansion. The financing is expected to expand the company’s production and range of consumer-ready products, as well as strengthening export products.