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Food for thought: Supporting Serbia's frozen foods sector
EUR13.1 million EBRD loan helps Frikom promote expansion
The EBRD is lending Frikom A.D., Serbia and Montenegro’s largest ice cream and frozen food manufacturer, €13.1 million to help improve production facilities, upgrade irrigation systems to produce more raw materials from its own land, and help the company expand beyond its own borders to neighbouring countries.
The six-year loan will also enable Frikom to improve efficiency, expand its domestic distribution network, and improve levels of corporate governance by introducing best practice management and accounting standards to international levels.
Hans Christian Jacobsen, Director for Agribusiness at the EBRD, said this project is important for the Bank because it promotes cross-border integration. It is encouraging to see that more and more local agribusiness companies are, through expansions, interested in the regional dimension, which is crucial for economic development across the Western Balkans, Mr Jacobsen added.
Frikom, the former state-owned company, is majority owned by Agrokor, the largest food company and leading ice cream producer in Croatia, following its acquisition of a 55 per cent stake from the Serbian and Montenegrin government last year as part of its strategy to expand in Southeast Europe. The acquisition is the first significant cross-border investment of a Croatian food company in Serbia and Montenegro in recent times, and indicates an important step supporting the reintegration of economies in this region.
The project also rekindles a successful relationship between the EBRD and Agrokor. In 2000, the Bank extended the Croatian company a €170 million syndicated loan to help improve its regional operations and raise its international profile. Agrokor is expected to inject fresh capital into Frikom to help its further development.
Mr Todoric, Chief Executive Officer of Agrokor and Chairman of the Board at Frikom, said this loan will help Frikom fulfil a strategy to continue to expand domestically and be part of Agrokor’s efforts to become the leading regional player in the frozen foods market. Mr Todoric added that Frikom will also benefit from Agrokor’s majority ownership, especially through its knowledge, expertise and experience of making good companies even better.
Dragica Pilipovic, Director for the EBRD office in Serbia and Montenegro, said the Bank is pleased to be able to support agribusiness projects in Serbia because they have a strong impact on the economy. Ms Pilipovic added that the deal is a good example of the EBRD’s strategy for Serbia and Montenegro, where regional cooperation, agribusiness and private sector development are key priorities. The EBRD is the largest investor in the agribusiness sector across its 27 countries of operations, with more than 200 investments worth more than €3 billion. The EBRD has signed 20 projects worth more than €150 million in Serbia and Montenegro.
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