|
Bonduelle, world’s top processed-vegetable producer, expands in Russia
€15 million equity investment from EBRD towards new plant in Krasnodar
The world’s largest producer of processed vegetables is working with the EBRD to expand its operations in Russia. Bonduelle, the market leader in Russia thanks to imports from its industrial sites abroad, will use a €15 million equity investment from the Bank, together with its own resources, to build a plant in Krasnodar, in southwest Russia, to process locally grown products.
The €41 million plant, with 65 per cent of finance provided by Bonduelle, will be completed in two phases and eventually produce 60,000 tonnes of fresh packaged vegetables a year – mainly sweet-corn and peas. The first investment of €23 million will produce 25,000 tonnes annually, followed by a second investment in 2008 of €18 million.
The EBRD’s involvement, which is for a 35 per cent stake in the company, will offer political support for long-term investment by an international investor in the Russian primary agriculture sector, which to date has attracted little foreign investment.
Jean Lemierre, President of the EBRD, said the success of the contemplated project lies in Bonduelle’s development of local farming processes for the cultivation of peas and sweet-corn since 1998 – and now in the transfer of such knowledge to Russia. The proper testing of the market in Russia with imports from existing plants over recent years has shown there is a strong demand for these products. With this new plant, Mr Lemierre added, Bonduelle will bolster its own activities in the country while also strengthening the local economy by outsourcing part of the production of raw materials to local farmers and suppliers.
Bonduelle, a French company quoted on the French Bourse, is the largest producer of canned, frozen and fresh-packaged vegetables in Europe. It began its operations in central and eastern Europe with the acquisition of plants in Hungary (1992) and Poland (1994). With exports to Russia beginning shortly thereafter, Bonduelle is today a leading brand name in the country, synonymous with canned sweet-corn, a product that was not widely consumed in Russia before. The Krasnodar region is considered one of the most fertile and suitable areas for the cultivation of sweet corn and peas.
Christophe Bonduelle, Chairman of the Supervisory Board of Bonduelle, said the EBRD financing is an important element of his company’s efforts to solidify its position as one of the largest producers of canned vegetables in Russia. He said the Bank’s partnership offers Bonduelle comfort towards certain political risks of operating in Russia’s primary agriculture sector. The partnership may also open doors to further investment opportunities between the EBRD and Bonduelle, he added.
The EBRD is one of the largest private-sector investors in Russia, and the Bonduelle project is part of the EBRD’s ongoing commitment to the region. The transaction offers an important demonstration effect for agriculture investments in at least two regards – by introducing a new crop and production activity, and by cultivating land through long-term lease agreements with local kolkhozes (collective farms). The EBRD has now signed 186 investments in the agribusiness sector totalling more than €3 billion.
|
