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EBRD chips into Polish potato production
A new Polish potato processing plant, Farm Frites Poland SA (FFP), will commence its operations in time for this year's harvest following an ECU 11.4 million equivalent loan agreement signed today with the European Bank for Reconstruction and Development (EBRD).
Hans Christian Jacobsen, Director of Agribusiness at the EBRD, said: "The company intends to become the highest quality producer of processed potato products in the Polish market. Via existing sales and marketing affiliates it will be able to establish a strong presence with distributors and wholesale operators. In addition, the company will support Polish potato farmers through supply arrangements and up to 200 jobs will be created in the Slupsk region of northern Poland".
The proceeds of the loan, which has an A/B structure, will be used to finance the greenfield construction and equip the integrated processing and storage facilities. The B portion of the loan, ECU 3.5 million, has been syndicated to ING Bank of the Netherlands. De Nationale Investeringsbank is providing a subordinated loan of ECU 2.2 million.
FFP is 100 per cent owned by Central European Potato Ventures b.v., a Dutch joint venture company owned equally by Farm Frites Beheer b.v. and Aviko b.v., both of the Netherlands. Farm Frites and Aviko are two of Europe's major potato processors and both have been marketing their brands in Poland for several years.
Initially the plant will concentrate on frozen french fries, although it has the capacity to produce a wide range of processed potato products. Targeted markets are mainly the domestic retail, fast food and catering sectors, although the company will also seek to export its products. The Slupsk region has ideal weather conditions for growing high quality potatoes, and the initial annual output capacity of the processing plant will be 40,000 tonnes, with a potential capacity of up to 100,000 tonnes per year. The total project cost is approximately ECU 30 million.
Note: An A/B structured loan is where the EBRD finances a portion of the loan (the A part) from its own funds and syndicates the remainder (the B portion) to a commercial lender.
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