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Leading food retail chain in the Baltic states receives EBRD support
Financing of €12.1 million from the European Bank for Reconstruction and Development (EBRD) will enable Baltic Food Holding to develop its retail and wholesale activities in Estonia, Latvia and Lithuania by acquiring new supermarkets, upgrading its existing stores and expanding wholesale operations. The financing consists of a loan of €6.6 million to Baltic Food Holding Estonia and a €5.5 million equity investment in Baltic Food Holding AS, which is based in Norway.
"The project builds on the company's current position as one of the largest pan-Baltic food retailers and wholesalers," said Hans Christian Jacobsen, Director of the EBRD's Agribusiness team. "Consumers and food producers across the Baltic states will benefit from an improvement in food distribution as a result of this project. The EBRD is looking forward to working with the company and with two excellent sponsors, Axfood and the Selvaag Group, which have complementary skills to support the strong management team."
"We are pleased to have the EBRD providing this financing. It will enable us to expand even faster and become one of the main players in food retail and wholesale in all the Baltic countries," said Stein Skjørshammer, Managing Director of Baltic Food Holding. He added: "With Selvaag supporting the operations on the property side, Axfood adding their expertise on food wholesale and retail and building on Baltic Food Holding's local knowledge and experience, we are well positioned for future growth. The participation of the EBRD will only strengthen these relationships further."
"Since the start in 1995, we have been building the business adding one shop at the time. We have also been operating the shops with different names. In the autumn, we will increase our visibility in the market and consolidate the branding by converting our stores into Spar shops. With over 60 shops, few, if any, chain has more stores than we have."
"Our first investment in Baltic Food Holding was in autumn 1997," said Olav H. Selvaag, one of the owners of Selvaag Group and a Supervisory Board Member of Baltic Food Holding. "We are happy with the development of the company so far. This could be easily turn out to be one of our best investments. In addition to active participation in the development of the company, we are also investing in property related to the shops. We built the main office and wholesale facility in Tallinn through our company Retail Properties AS. This we will continue and we will hopefully be able to accelerate the development on the real estate side."
"Through our investment in Baltic Food Holding, together with our activity in Sweden and Finland, we have built a solid foundation for further growth around the Baltic Sea," said Mats Jansson, Managing Director of Axfood AB. "This market with approximately the same number of inhabitants as Sweden, has a tremendous potential for growth and we want to have a significant market share in all three Baltic states. We already have a good market position, and with the EBRD’s financing, we will be able to continue our expansion and compete effectively. The achievements to date with a remarkable growth, looks promising for the future."
Axfood AB
Axfood AB is a leading Swedish food retailer, which is 45 per cent owned by Axel Johnson AB. Axfood was formed in the beginning of 2000 through the merger of Hemköp, D&D Gruppen and Spar Finland to form the second-largest Swedish food retail company, building on the long history of retailing and wholesaling expertise in the Axel Johnson group and creating a strong Nordic player.
(For further information, visit Axfood's web site : http://www.axfood.se)
Selvaag Group
Selvaag Group is a privately owned Norwegian company dating back to 1920. It has its foundation is Selvaagbygg’s long history as a house builder in the Oslo area. The company has companies and operations in several countries and business areas: turnkey construction and sale of residential and commercial projects, import and production of cement, real estate management and financial investments.
(For further information, visit Selvaag's web site : http://www.selvaag.no)
EBRD
The EBRD was established in 1991 to aid the transition from centrally planned to market economies in central and eastern Europe and the Commonwealth of Independent States. It is owned by 61 shareholders – 59 countries, the European Investment Bank and the European Community – and operates with €20 billion in authorised capital. This project brings the total number of the EBRD investments in the food processing and food retail sector to 117 totalling €1.98 billion.
Baltic Food Holding Group
Baltic Food Holding was started in 1995 by Stein Skjørshammer, Managing Director of the company, and Hans Jørgen Blomseth, Chairman of the Board.
The chain has been rapidly expanding and contains 65 shops and two wholesale companies in Estonia and Lithuania together with a distribution centre in Latvia, with a total of 80 shops planned for the end of 2000.
Main current shareholders in Baltic Food Holding are Ayers Development (Selvaag Gruppen), the Norwegian Government Regional Development Fund, Axfood AB, S. Skjørshammer and H.J. Blomseth.
Baltic Food Holding’s business idea is to supply the Baltic market, through its own wholesale and retail outlets quality merchandise at competitive prices in clean, friendly and convenient neighbourhood stores. The company is operating through 100 per cent owned companies in Estonia, Latvia and Lithuania.
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