Press Release
Tuesday, June 24, 2008
U.S. SMALL BUSINESS USES SECOND OPIC LOAN TO EXPAND CASHMERE PRODUCTION IN AFGHANISTAN
WASHINGTON, D.C. – A U.S. small business that used a loan from the Overseas Private Investment Corporation (OPIC) in 2003 to successfully expand its cashmere wool export operation in Afghanistan will use a second OPIC loan to provide greater liquidity to its Afghan suppliers, enabling the company to generate greater cashmere exports to Europe and local employment in Afghanistan.
American Wool-Cashmere Inc. of Takoma Park, Maryland, will use a $10 million OPIC loan facility both to purchase Afghan cashmere wool and to advance funds to contracted partners in order to expand their ability to purchase the wool from farmers and middle men in Afghanistan.
The wool is seasonally sheared from goats that are owned by small farmers, who then sell it in unprocessed form to middle men or directly to suppliers that work with American Wool-Cashmere. The suppliers in turn hire large numbers of workers to remove by hand the coarse surface wool. Although the employment is seasonal, it lasts five to seven months, and follows the country’s harsh winters.
In 2003, OPIC provided a $3 million loan to American Wool-Cashmere, which was successfully repaid, together will all accrued interest, ahead of schedule.
“Afghanistan is one of the world’s major producers of cashmere wool, behind only China and Mongolia, but its production levels are sub-optimal. Projects such as this one, which improve the efficiency of the industry, could enable Afghanistan to double its cashmere wool production annually,” said OPIC President and CEO Robert Mosbacher, Jr. “OPIC is pleased to work a second time with a U.S. small business that has successfully demonstrated that American investment in Afghanistan can yield positive results.”
American Wool is owned by Nesar Nusraty, an Afghan-American entrepreneur who came to the United States as a teenager and established a carpet and drapery-cleaning business.
OPIC was established as an agency of the U.S. government in 1971. It helps U.S. businesses invest overseas, fosters economic development in new and emerging markets, complements the private sector in managing risks associated with foreign direct investment, and supports U.S. foreign policy. Because OPIC charges market-based fees for its products, it operates on a self-sustaining basis at no net cost to taxpayers.
OPIC’s political risk insurance and financing help U.S. businesses of all sizes invest in more than 150 emerging markets and developing nations worldwide. Over the agency’s 37-year history, OPIC has supported $177 billion worth of investments that have helped developing countries to generate over $13 billion in host-government revenues and create over 800,000 host-country jobs. OPIC projects have also generated $71 billion in U.S. exports and supported more than 271,000 American jobs.