Lviv, Ukraine, May 22, 2007—IFC,
the private sector arm of the World Bank Group, is providing long-term
financing to Open Joint Stock Company Concern Khlibprom, a leading regional
integrated industrial manufacturer of bread and bakery products in Ukraine.
The investment will allow the company to modernize and expand its operations,
reaching more people in the central and western regions of the country.
IFC’s financing consists of a $20 million
senior loan and $10 million quasi-equity investment. Khilbprom will use
the funds to increase its production capacity in the Lviv region, build
a new flour mill with grain processing capacity of 43,000 tons per year
and storage capacity of 30,000 tons, modernize bakeries in Lviv and Vinnytsa,
expand and upgrade its own specialized retail
chain outlets, and refinance short-term
debt. The total estimated cost of the project is $45 million.
IFC is also helping the company develop
a long-term strategy, build up financial controls and logistical functions,
and implement a HACCP food safety system.
“The deal with IFC is not only about
long-term and reasonably priced financing. Having IFC as a partner opens
new doors for us in terms of access to international experience and best
practices. Assistance from international consultants will bring our company
to a new level,” said Vadim Vyshnevskyy, General Director of Concern Khlibprom.
Jean-Paul Pinard, IFC Director for Agribusiness,
noted, “Our investment in Khlibprom is in line with our strategy to support
the sustainable development of locally owned agribusiness companies in
Ukraine that have the potential to develop as market leaders in their industry.
We are very pleased to start a long-term partnership with Khlibprom and
assist the company in achieving its leadership goals.”
“This is the first IFC investment in
Ukraine’s bread and bakery industries, which have a strong potential for
growth and development. Our financing will not only help the company grow
and modernize its business, but will also contribute to improving the economic
situation in one of the country’s poorest regions. This could lead to
an increase in production, growth in employment, and demand for locally
grown grain, helping improve the lives of local farmers,” added Elena
Voloshina, head of IFC’s operations in Ukraine.
IFC, the private sector arm of the World
Bank Group, promotes open and competitive markets in developing countries.
IFC supports sustainable private sector companies and other partners in
generating productive jobs and delivering basic services, so that people
have opportunities to escape poverty and improve their lives. Through FY06,
IFC Financial Products has committed more than $56 billion in funding for
private sector investments and mobilized an additional $25 billion in syndications
for 3,531 companies in 140 developing countries. IFC Advisory Services
and donor partners have provided more than $1 billion in program support
to build small enterprises, to accelerate private participation in infrastructure,
to improve the business-enabling environment, to increase access to finance,
and to strengthen environmental and social sustainability. For more information,
please visit www.ifc.org.
IFC in Ukraine
Ukraine became a shareholder and a member
of IFC in 1993. As of May 1, 2007, IFC had invested $692 million
in 33 projects in the country. Our investment program in Ukraine
is expanding rapidly with a focus on the financial, agribusiness, construction
materials, retail trade and services, energy, and infrastructure sectors.
We have also been conducting an extensive advisory program since 1992,
which initially focused on the privatization of small businesses, land,
and idle construction sites. Current donor-funded programs offer advice
on corporate governance, leasing, and agribusiness. We also seek to improve
the business environment and promote growth of small and medium enterprises.
For more information, please visit www.ifc.org/ukraine.
About OJSC Concern Khlibprom
Founded in 2003 and headquartered in
Lviv, Khlibprom is the agribusiness arm of Universal Investment Group.
The company owns and operates three flour mills, 14 bread making plants,
and 81 retail stores in western and central Ukraine. In 2006, the company
produced 105,000 tons of bread, a 66 percent increase from the previous
year. Khlibprom currently ranks third by volume among the Ukrainian industrial