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Ice cream 'bombs' in Kyrgyz Republic

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A bit of ice cream in my life.

Started with 200 kilos of ice cream.

Loan helps to buy new production equipment.

Sergey Lee knows how to make a bomb. “It must be round and have a strong flavour of crème brûlée. And sales are guaranteed,” says Mr Lee, Director of Sheen-line, a dairy producer specialising in ice cream, located in Bishkek, the Kyrgyz capital.

Sheen-line makes about a hundred varieties of ice cream but ‘Bomba’ is the biggest-seller. It has conquered the Kyrgyz Republic, Kazakhstan and Tajikistan. Children go mad after it. Adults who found its bomb-like shape inconvenient at first now love it.

From 15 to 300 employees

The Sheen family ice cream dream started in 1998 when Mr Lee was a medical student. He would have been a doctor today had he not gathered with a few friends one hot summer afternoon and decided to make ice cream in their spare time to earn extra money. “Some gather to create political parties,” says Mr Lee, “but I prefer to discuss business.”

Together with his wife, Veronika, and 13 workers, Sergey Lee managed to produce 200 kilos of ice cream per day in the first year. It was not the easiest and sweetest job as all production was done manually.

As ice cream sales rose, Mr Lee decided to bid farewell to medicine once and for all.

“My parents wanted me to become a doctor but now I cannot imagine my life out of this ice cream business,” says Mr Lee.

His first move was to convince his family to help buy the property where the Sheen-line company is located today.

He shares an office with the company managers and says that “sharing the same office helps to cut down telephone expenses and I would prefer to invest money in equipment to make ice cream rather than on telephone bills.”

Mr Lee’s staff has grown 20 times, from 15 employees in 1999 to 300 in 2006. Women make up 60 per cent of the company’s work force.

Loan helps to expand business

As Mr Lee walks around the laboratory, the warehouse and the production room, he shows off with pride the equipment that changed his business for good: ‘Tecno ice’, the ice cream production line he bought in Italy; another line to produce skimmed and dry milk; and the company’s new refrigerator vehicles.

He bought these with a $900,000 loan from the Kyrgyz Investment Credit Bank (KICB). The EBRD, the Aga Khan Foundation and other shareholders established KICB in 2000 using technical assistance from Japan. They set up KICB to finance companies such as Sheen-line whose capital needs are higher than the amounts that local banks can lend.

Building credit availability is one of the goals of the EBRD’s initiative for the seven ‘Early Transition Countries’ (ETCs), the poorest in the Commonwealth of Independent States: Armenia, Azerbaijan, Georgia, Kyrgyz Republic, Tajikistan, Turkmenistan and Uzbekistan.

Using its own resources and KICB loans, Sheen-line developed to the point that bulk buyers now queue at the doors. Last year, Sheen-line sold 9,000 tons of ice cream. The company supports the local economy: last year it bought 10,500 tons of milk from Kyrgyz farmers.

“There are about 30 ice cream producers in the Kyrgyz Republic but we pride ourselves on being the biggest. Big businesses have big dreams and that is why they need working capital flowing in” from banks such as KICB with the finances and desire to build small and medium enterprises.

To add more good news, in July 2006 Sheen-line qualified for a €2 million loan provided directly by the EBRD, which will help the company to purchase even more new ice cream production equipment, expand its distribution network and develop its milk collection infrastructure. Sheen-line will also develop its sales and marketing strategies with expert advice from the EBRD’s TurnAround Management programme, supported in the Kyrgyz Republic by the Early Transition Countries fund, created in 2004 by EBRD donors.

Sheen-line is now a major exporter. Its butter, skimmed and dry milk are well-known in Afghanistan, Kazakhstan, Pakistan, Turkmenistan and Uzbekistan. “The loan will help us to expand in the Russian and Tajik markets and to employ more people,” says Mr Lee.

When asked about the recipe to build a successful business like his, Mr Lee offers a taste of ‘Bomba’ suggesting that a good business is built on good quality. “It is easy to conquer the world with Sheen-line’s ‘Bomba’,” adds a smiling Sergey Lee.

By Marjola Xhunga, communications adviser
Photos: Vladimir Pirogov
Contact: EBRD Kyrgyz Office

26 August 2006