South African Rand Denominated Loan for Manufacturing and Sales Business of Automotive Tires by Japanese Company in South Africa
Supporting Overseas Business Expansion of Japanese Companies through Local Currency Denominated Financing under the Growth Investment Facility
- Region: Africa
- Manufacturing and Services
- Overseas Investment Loans
The Japan Bank for International Cooperation (JBIC, Governor: MAEDA Tadashi) signed on May 7 a loan agreement amounting up to ZAR400 million (JBIC portion) with Bridgestone Europe NV/SA (BSEU), a Belgian subsidiary of Bridgestone Corporation (Bridgestone). The loan is co-financed with MUFG Bank, Ltd., bringing the total co-financing amount to ZAR668 million. The loan is extended under JBIC's Growth Investment Facility*1
The purpose of this loan is to provide part of the funds necessary to upgrade equipment in the automotive tire manufacturing plant of Bridgestone's South African subsidiary, Bridgestone South Africa Holding (Pty) Ltd, through BSEU.
Bridgestone has the top share of sales in the global tire market. South Africa is the biggest automobile market in Africa, and drives Africa's automotive industry as a production base for automobile and auto-parts manufacturers. Future market expansion is forecast due to a growing population and a developing economy. Amidst this backdrop, Bridgestone plans to increase its production capacity and market share in South Africa by upgrading the equipment in its automotive tire manufacturing plant located in the country. This loan will thus contribute to Japanese industry maintaining and improving its international competitiveness by supporting the overseas business expansion of Bridgestone through funding denominated in South African Rand.
At the Seventh Tokyo International Conference on African Development (TICAD7) held in August 2019, high quality infrastructure investment for the industry diversification and strengthened connectivity in Africa was one of the important themes. With collaborations between the public and private sectors, the Japanese government plans to further enhance support for the African region. At TICAD7, JBIC announced the renewal of its Facility for African Investment and Trade Enhancement (FAITH) by establishing FAITH3*2
. This project is extended under FAITH3 in line with the policy of the Japanese government.
As Japan's policy-based financial institution, JBIC will continue to support the overseas business development of Japanese companies by drawing on its various financial facilities and schemes for structuring projects, including local currency loans, and performing its risk-assuming function.