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Modernisation of Serbian dairy firm Somboled
EBRD loan to help boost local economy, promote regional co-operation
Somboled, a successful dairy producer in Serbia with a long tradition, is
investing to increase productivity and boost operations across the country
with the support of a €10 million loan from the EBRD.
The modernization programme will include investments in new technology to
improve quality and efficiency and to help make environmental improvements. It
will also raise the company’s profile through enhanced marketing and the
development of new products.
Somboled, which today employs more than 320 staff, has built its success as a
result of high-quality products, both under the umbrella brand of Somboled, as
well as with well-known products such as Vojvođanka and Somborska feta - the
market leader in soft cheese in Serbia. Somboled’s reputation also reflects
its close cooperation with milk producers and the high quality of its
management.
Zlatko Brzić, General Director and President of the Management Board of
Somboled, said the overall modernization project, including the EBRD loan,
covered financing of €23 million for a period of five years for the long-term
development of the company. The project underscored the company's goal of
becoming a market leader in the dairy sector with a nationwide presence and at
the same time improving operational efficiency and shifting production towards
higher value added products.
Ivan Kliček, CFO of the Croatian company LURA, a majority shareholder in
Somboled, said the successful Serbian company had become the focus of its
operations in that market after it signed a strategic partnership with
Somboled in 2003. After assuming majority ownership, LURA began the process of
integrating Somboled. That integration, together with plans for modernization
and an improvement in the development cycle, are a key part of the agreement
between the EBRD and Somboled, and, LURA believes, crucial to Somboled’s
future prosperity.
Hans Christian Jacobsen, EBRD Director for Agribusiness, said this loan will
enable a local company to develop to become more modern and competitive in the
local market. The loan will also enable Somboled to create strong links with
the local farming community by sourcing their raw materials and helping to
boost the local economy, he added.
Dragica Pilipovic-Chaffey, EBRD Director for Serbia and Montenegro, said this
important investment supports the restructuring and modernisation of a local
dairy company following its privatisation. It demonstrates how having a strong
strategic private investor can have a significant impact on the development of
a business, she added.
The EBRD is the largest investor in Serbia and Montenegro, having committed
around €900 million in 61 projects in various sectors across the country. In
the agribusiness sector alone, the Bank has to date committed around €4
billion in more than 250 projects across central and Eastern Europe and the
Commonwealth of Independent States.
Somboled was established in 1934 and privatized through the process of
privatization of publicly owned companies from 1991 until 2000. In 2004, Lura
d.d. Zagreb, which is one of the largest regional dairy producers with the
sales of €313 million in 2005, became majority shareholder of Somboled through
a €9 million capital increase. It how holds more than 97% of Somboled.
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