IFC, FITESA to increase non-woven production capacity in Brazil

Nonwovens

IFC, a member of the World Bank Group, is supporting a new project to strengthen Brazil’s healthcare and hygiene sectors and increase domestic production capacity with less impact on the environment. The $50 million financing for Fitesa, Latin America’s largest producer of spunmelt non-woven, will support the company in expanding its production of medical masks, hospital gowns and other healthcare personal protective equipment.

As part of the company’s investment plan to strengthen the operation of its two main plants in Brazil, located in the states of São Paulo and Rio Grande do Sul, 65 percent of the loan will be allocated to the replacement of more sustainable equipment in industrial production, resulting in a reduction in energy consumption. Fitesa’s non-woven production capacity will increase by 20,000 tons per year, which means a 17 percent growth from the current volume. IFC’s investment will address key development challenges of Latin American and the Caribbean by improving competitiveness and increasing productivity and addressing climate change and supporting sustainable growth.

This is IFC’s first project with Fitesa, and it is part of IFC’s Global Health Platform (GHP). The GHP is $4 billion program aimed at mobilizing private investment in order to close the massive healthcare supply gaps created by COVID-19. The World Health Organization (WHO) estimates that the private sector must invest more than $60 billion to expand manufacturing and delivery capacities for healthcare products to meet the demands of the pandemic.

“We are happy to develop projects that simultaneously contribute to the economic and environmental development of the business. This plant will receive unprecedented technology in Latin America, with the potential to reduce the consumption of materials of fossil origin and energy consumption. This means a greater contribution to the reduction of the carbon footprint in our value chain, delivering products of the highest quality and performance to the market worldwide”, says Sandro Nogueira, Global Manager of Treasury at Fitesa.

With this project, IFC fulfills its role of offering long-term credit, with conditions that are not available in the market for the private sector due to the scarcity of resources. The proposed funding aligns with IFC’s Textiles and Apparel Deep Dive report presented to the Board of Directors in January 2020, which encourages IFC investments in companies to increase complexity in products, processes, and value chains.

“One of IFC’s strategic priorities in Brazil is to encourage productivity gains through plant expansion and supply chain integration. Given the global pandemic, the role of the private sector will be key to increase regional and local medical equipment manufacturing capacities and encourage the resilience of the Brazilian healthcare system,” says Carlos Leiria Pinto, IFC’s Country Manager in Brazil.

Fitesa was founded in 1973 a textile manufacturer of packaging, carpet, and other fibers. In 1989, the Company opened its first non-woven manufacturing plant in Gravatai, Brazil. Since then, it has expanded its technology portfolio and specialized in developing innovative solutions for the hygiene, healthcare and industrial markets. Currently, Fitesa operates 23 production units and 5 innovation centers around the world.