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Russian farmers to benefit from EBRD support for grain storage network
$30 million financing for Louis Dreyfus Commodities’ silos in southern and central Russia
The European Bank for Reconstruction and Development is providing $30 million
for the modernisation and expansion of a silo network to be managed by an
affiliate of one of the world’s largest commodity groups.
The EBRD’s backing will help the Louis Dreyfus Commodities Group (LDC) upgrade
and expand its silo infrastructure in the Stavropol, Rostov, Volgograd and
Voronezh regions of southern and central Russia, which are among the main
grain growing areas in Russia. The silos are owned by Russia Elevator Company
(RusElCo), a company in which LDC acquired a majority stake in 2005.
RusElCo’s strategy is to offer international standards of reliable storage and
handling services to the farmers, international and local traders and state
entities making up its client base.
The Bank’s financial participation will develop storage and handling
infrastructure critical to realising Russia’s huge potential as a grain
exporter.
The investment will also contribute to improving the interaction between
suppliers of agricultural commodities, reducing price distortions, and
expanding the market for other Russian agribusiness companies.
EBRD Agribusiness Director, Gilles Mettetal, said the Bank was helping to
transform outdated storage facilities into modern, competitive ones, which
would offer world market standards of services. By supporting the operations
of large foreign market leaders in the region the Bank was also helping
stimulate competition and promote greater efficiency, Mr. Mettetal added.
LDCommodities Chairman Robert Louis Dreyfus emphasized the company’s long-term
commitment to the region. The company is building a solid network of
strategically located assets and gives high importance to the quality of its
local management, especially that of silo managers, for the development of its
operations in the region.
The EBRD has so far committed around €4 billion in more than 280 agribusiness
projects across central and Eastern Europe and the Commonwealth of Independent
States. In Russia, the Bank has invested €1.3 billion in around 76
agribusiness projects to date.
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