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The seeds of growth
EBRD loan to Kazakh sunflower oil producer will finance expansion
The European Bank for Reconstruction and Development is lending $16 million to
Turkuaz Edible Oil Industries (TEOI) to support the company’s expansion in
Kazakhstan.
The sunflower-oil company, based in Aktobe, western Kazakhstan, plans to
improve its seed refining and crushing through a brownfield expansion that
will approximately double overall capacity, currently 22,500 tonnes a year.
Having already close ties with Russian seed suppliers, TEOI is now also
developing sunflower seed cultivation in the Aktobe and neighbouring regions.
Sunflower production in Kazakhstan is still small compared to Russia and
Ukraine, and not enough sunflower oil is yet produced locally to fully supply
the domestic market.
“Our strategy is to develop high quality products at a competitive price and
build a market share of over 30 per cent within the coming years on the still
relatively fragmented Kazakh edible oil market,” said Nafez El-Morhabi,
General Manager of Turkuaz Edible Oil Industries.
The EBRD loan has both long-term and short-term elements, with the long-term
tranche earmarked for capital expenditure and the short-term for financing the
purchase of sunflower seeds and inventory. The EBRD financing to TEOI is
available in either US dollars or Kazakh tenge.
“The project is an opportunity for the Bank to provide both US dollar and
local currency financing for a key sector in Kazakhstan, as well as to build a
relationship with a dedicated multinational sponsor with a long-term vision
for the region and a leading agribusiness company in the Middle East”, said
EBRD Agribusiness Director Hans Christian Jacobsen.
Turkuaz Edible Oil Industries was established in 2003. Savola Edible Oils
International, a leading producer in Africa, the Middle East and central Asia
where it operates in more than 8 markets, bought a 90 per cent stake in TEOI
in October 2004 and has invested $20 million since. Savola Edible Oils
International is a subsidiary of the Savola Group, a major Saudi Arabian food
and retail company.
Since its establishment in 1991 the EBRD has signed more than 265 projects
worth €4.0 billion in the agribusiness sector alone.
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