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Russian chewing gum producer sweetened with EBRD finance
ZAO Dirol, a newly created joint-stock company owned by Dansk Tyggegummi Fabrik A/S (DTF), the largest European chewing gum manufacturer, and the Danish Investment Fund for Central and Eastern Europe (IØ-Fund) will be supported with a DM 100 million (ECU 50.5 million) financing package from the European Bank for Reconstruction and Development (EBRD) and three commercial banks. The funds will be used to finance the construction of a new chewing gum production facility in Novgorod, Russia.
"An important element of the EBRD's role is to encourage foreign investors and lendings by commercial banks into the region. This will be a highly visible investment made by an industry leader, which will serve as a showpiece for modern, cost-effective production in Russia," said Reinhard Schmoelz, the EBRD's Russia Team Director.
Hans Christian Jacobsen, Director of the EBRD's Agribusiness Team, added, "Dirol will create significant opportunities for both local suppliers and distributors. Its market entry will increase competition in the consumer goods sector, raising the level of skills and reducing the need for imports".
The EBRD's commitment comprises a DM 60 million (ECU 30.3 million) loan for the Bank's account plus a DM 40 million (ECU 20.2 million) loan which has been syndicated to three commercial banks, Rabobank Nederland, Den Danske Bank and Bikuben Girobank. The proceeds will be used to pay for construction of a production facility with a capacity of 7,000 tons per year, equipment and related services. The new facility will directly create 304 full-time jobs in Novgorod.
"In addition to the training and management know-how transferred to the local company, the proximity of the plant to local markets will ease development of distribution channels and skills among Russian companies," said Lars Funder, Chief Executive Officer of DTF, a privately owned company which produces such brands as Stimorol, Dirol and V6.
The plant will be operated to Western standards with strong emphasis on quality management and will meet European Union and Russian standards for the environment.
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