In cooperation with Danish companies the Industrialisation Fund for Developing Countries (IFU) invested DKK 1.6bn in 30 new projects in 2004. This is the largest number ever in a single year. Most of the projects are production or service companies, and the investments will create a total of 12,000 new jobs in the developing countries. Furthermore, IFU made additional investments in 14 existing projects, and all in all IFU invested DKK 444m in developing countries in 2004.
“Since 1967 IFU has invested in developing countries in cooperation with Danish companies to create sustainable employment, growth and development. We highly emphasise social and environmental issues. Furthermore, the projects must be healthy enough to manage in the future without our support”, says Frank Norman Larsen, Deputy Managing Director of IFU.
In 2004 IFU invested in new projects in 12 different developing countries in Central and South America, Africa and South and South East Asia. The projects include production of shoes, furniture, security systems, steel components and AIDS medicine. An increasing number of projects were placed in poorer developing countries, including Nigeria, where IFU has made its first investment in information technology and Internet connections in an African country.
“IFU participates in 50-75% of Danish companies’ investments in the developing countries. IFU is far more involved than similar organisations in Sweden and Great Britain. This has to do with the fact that IFU provides money as well as advice on how projects in developing countries can become successful. In addition, more than 60% of the new projects have been established in cooperation with small and medium-sized enterprises. They now have an opportunity to enter new markets and improve their future”, says Frank Norman Larsen.
One example is Danish Steel Partner, which is a partnership in India between three small, Danish machine works. The joint venture has created new market opportunities for the Danish companies and has created new jobs in India as well as Denmark.
The Danish Ministry of Foreign Affairs carried out an evaluation of IFU in 2004. It concluded that the Fund has developed unique expertise within investments in developing countries, and that it makes a significant contribution to the countries’ development. The report recommended that the Fund should invest more in the poorest countries, and that it should focus more on projects involving small and medium-sized enterprises.
Against this background IFU has introduced a special globalisation package aimed at small and medium-sized companies. Moreover, 90% of the Fund’s investments in 2004 were made in the poorest developing countries.
IFU’s net result displayed a profit of DKK 31m in 2004 against a profit of DKK 97m the year before. In 2004 the Fund transferred money back to the State for the first time, DKK 750m in total. As a consequence, IFU had to introduce a maximum amount for future investments. Furthermore, the Fund had to lay off staff, and future profits will be smaller than they have been so far.
For further information, please contact:
Frank Norman Larsen, Deputy Managing Director, IFU, tel +45 33 63 75 00
IFU’s annual report may be ordered at email@example.com