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Soko Štark, a leading confectionary producer in Serbia, will use a €10 million loan to modernise its machinery and develop its brand.

EBRD finance supports expansion of the hypermarket chain Cora.








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Case studies

Savouring the sweet smell of success

It has been making the chocolates and biscuits for dipping into coffee – so loved in south-eastern Europe’s steamy cafés – since 1922. Soko Štark, Serbia’s leading confectionery producer, has a long tradition of making sugary snacks and salty nibbles. Now this well-established company is modernising, with a €10 million loan from the EBRD.

The loan will help Soko Štark upgrade and renew its machinery and support its brand and market development. This will enhance a process that has been under way since Soko Štark’s privatisation, finally completed in 2005, and will reverse a lack of investment that had been affecting performance and sales.

The EBRD loan is just one element in a bigger picture. Improvements to this company with its long history in the region are part of a broader transformation of the economies of south-eastern Europe after the conflicts of the early 1990s. The most successful companies are now working together, forming region-wide trading ties – an outcome that was set as a priority for the area during the Bank’s Annual Meeting in Belgrade in 2005.

Soko Štark’s transformation was accelerated when a majority stake was bought in 2005 by Grand Kafa, a local company majority-owned by the largest food and beverage company in neighbouring Slovenia, the Droga Kolinska Group.

Droga Kolinska’s aim is to become the largest food group in the region. Already selling brands such as Argeta, Grand Kafa and Soko Štark worldwide, it has also been acquiring and investing in companies in Serbia and Bosnia and Herzegovina.

“It is important to build business with neighbouring countries if we are to become the biggest food group in the region,” said Robert Ferko, Droga Kolinska’s chairman. “Droga Kolinska already generates over 75 per cent of its income in foreign markets. We believe that building our position through investment and modernisation is of mutual interest for all parties involved: Droga Kolinska, Soko Štark and the local and regional economy.”

Since Droga Kolinska became a majority stakeholder, Soko Štark has been restructuring and modernising across the board and making significant additional investments. It currently employs over 1,400 staff in Belgrade and looks set to meet its latest sales and net profit targets.

This EBRD investment is important as it supports the restructuring and the immediate modernisation of the leading Serbian confectionery producer following its privatisation process. The loan reflects the EBRD’s strategy of supporting projects that have a regional dimension and that demonstrate the benefits of cross-border investment.

Visitors to Serbia, meanwhile, can simply enjoy the biscuits and chocolates that café-goers here have always liked to dip in their coffee.

Fast moving consumer goods

Bonduelle Group, Russia: One of Europe’s leading fruit and vegetable processors, Bonduelle, received a €15 million EBRD loan in 2003 to finance the construction of a vegetable canning plant in Russia.

Carlsberg, Regional: EBRD investment of over €200 million has supported the activities of the Carlsberg Group, including its subsidiary Baltic Beverages Holding, in Croatia, Lithuania, Romania, Russia and Ukraine. Carlsberg is one of the world’s leading brewing companies.

Food distribution and packaging

Cora, Hungary and Romania: The EBRD provided financing of €95 million in 2003 to the leading French retail group Louis Delhaize for the expansion of their Cora hypermarket brand in Hungary and Romania.

Getro, Croatia: An EBRD loan and equity investment of €25 million is supporting the ongoing expansion of the leading Croatian cash and carry operator Getro.

Chumak, Ukraine: Chumak, a leading food producer based in south eastern Ukraine, will use the proceeds from the EBRD’s $26 million financing to expand its production and packaging facilities as well as finance the working capital needs of its growing business.

Agro-processing and trading

Cargill, Ukraine: To support Cargill’s sunflower seed operations in Ukraine, the EBRD has provided financing in excess of €65 million. Cargill is an international grain trading and processing company.

Floarea Soarelui, Moldova: Owned by WJ Group, Floarea Soarelui is Moldova’s largest vegetable oil producer. The EBRD has invested €6.2 million to support the purchase, storage and processing of sunflower seeds in Moldova.

Soufflet, Regional: The EBRD has provided €65 million of long-term financing to Group Soufflet, a French agricultural commodity processor and trader, for the acquisition and expansion of malting plants in the Czech Republic, Poland and Russia.



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