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EBRD finances Russian glass manufacturing project
The European Bank for Reconstruction and Development (EBRD) is providing a US$16.8 million (ECU 13.5 million) loan to assist in the expansion and modernisation of an existing glass manufacturing facility in Russia. The expanded facility will be owned by Faboyta Anopino Plus O.O.O.(Faboyta), a new company incorporated in Russia. The project will allow Faboyta to meet the standards required by foreign clients as well as increasing the domestic supply of quality bottles.
Signing on behalf of the EBRD, its President, Jacques de Larosière, said: "This project has an important transition impact: increasing the quality of domestically manufactured bottles will create greater competition which, in turn, will bring price and choice benefits to Russian consumers."
Faboyta is a joint venture-company which is 50 per cent owned by Anopino A.O., the oldest and one of the leading glass manufacturers in Russia. The remaining 50 per cent of the company is owned in equal shares by Kabrain Dos Asociados s.l. (a member of the Kabedosa Group, a private Spanish group with interests in the food and packaging business) and A.K. Robins Italia s.r.l. (a subsidiary of VHC Holding, a leading private US food processing technology manufacturer).
Guy de Selliers, Deputy Vice President of the EBRD and Director of the Russia team, said: "This financial injection will enable Faboyta to tap a rapidly developing market. Joint-venture partners to the project will bring important benefits, such as technical, financial and managerial know-how."
US$ 9.8 million in parallel co-financing is expected to be provided by Spanish commercial banks, with the possible support of the Spanish Export Credit Agency.
The proceeds of the EBRD loan will fund plant construction and new technology, allowing Faboyta to produce high-quality glass containers and expand its range of products. The company intends to market its products to local and international food and beverage companies, primarily those involving water, fruit juices, soft drinks, beers, wines and champagnes. The investment programme will introduce modern technology to bring the facility in line with international standards of practice on the environment and health and safety.
Present demand for glass bottles in Russia is relatively small, with current production of approximately 1 billion bottles a year. The potential market is expected to grow to 9-10 billion a year, and growth over the last three years has been at an annual rate of 30 per cent.
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