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EBRD finances paper production venture in Kazakhstan
$55 million to support expansion of Kagazy Recycling
The EBRD is providing the equivalent of $55 million in long-term financing to
Kagazy Recycling LLP to help the Kazakh private company complete the
restructuring and expansion of its paper business.
Kagazy Recycling is part of the fast-growing Kagazy Group, whose operations
include a range of businesses connected with paper manufacturing based upon
recycled waste paper in Kazakhstan. The group is the leading producer and
trader of a wide range of paper products in central Asia, including corrugated
paper, boxes, polygraphic papers, newsprint and office paper.
Kazakhstan has very limited forest resources and most paper products are
imported. The group established its paper business in 2001, to produce paper
based upon recycled wastepaper for the local market. A year later it acquired
its first paper production machinery and in 2003 it started trading.
The proceeds of the loans will finance the installation of new equipment to
expand significantly the company’s output, with the volume of paper production
scheduled to rise to over 85,000 tonnes per annum by 2012, from 40,000 now.
The aim is to build an incorporated paper business, comprising trading,
manufacturing and service facilities.
André Küüsvek, EBRD Director for Kazakhstan, said: “We are very pleased to
have the opportunity to participate in the current growth of Kagazy Recycling
and thus contribute to the development of the domestic paper industry in
Kazakhstan. The loan will help Kagazy Recycling make the most efficient use of
resources using established Western technology and management expertise. The
project also underscores the EBRD’s commitment to finance projects in the
corporate sector with a strong environmental impact”.
To-date, the EBRD has invested almost €1.5 billion in the country. 70 per cent
of the Bank’s portfolio in Kazakhstan is in the private sector.
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