HORTEX HOLDING S. A.

Location:

Poland

Project number:

3821

Business sector:

Agribusiness

Notice type:

Private

Environmental category:

B

Approval date:

03 Jun 1997

Status:

Completed

PSD disclosed:

20 May 1997

 

Project Description

Operational restructuring of the leading producer of fruit and vegetable juices in Poland.

The recapitalisation of Hortex will allow its management to complete the turnaround of the company, which was initiated in 1996. The Bank's financing, in addition to Bank of America's, will be used to restructure, modernise and selectively expand Hortex's operations in order to enhance its profitability.

Transition Impact

The project will have a strong transition impact stemming from: (i) the demonstration effect of a full-scale restructuring of one of Poland's largest companies; (ii) the positive impact on the local economy resulting from existing job retention; (iii) the enhancement of skills and technology at Hortex through operational training and support; (iv) the enhanced upstream raw material procurement linkages and the extension of the competitive market interactions between Hortex and the Polish farming sector; (v) the positive downstream distribution impact resulting from modernisation of Hortex's distribution practices; and (vi) the influence of the project within Poland as an example of good corporate governance.

The Client

Hortex is the leading Polish manufacturer of branded fruit juices and a significant producer of frozen fruit and vegetables. It is also one of the largest food-processing companies in central Europe. Hortex exports substantial quantities of apple and blackcurrant concentrate for consumption in western Europe and the United States. The company has established strong long-standing links with the Polish agricultural sector to meet its raw material procurement requirements.

EBRD Finance

Up to US$ 26.5 million (ECU 23.5 million) equity investment.

Project Cost

US$ 109 million (ECU 97 million).

Environmental Impact

This operation has been screened as B/1, requiring an environmental audit of the existing facilities and an environmental analysis of the proposed restructuring programme. The required studies have been carried out in the context of an overall assessment by an independent consultant. The environmental review confirmed that most of Hortex's facilities comply with current Polish and European Union environmental standards. The environmental awareness and appreciation of environmental, health and safety performance and potential liabilities of Hortex's management is very high and, as a result, many of the necessary investment programmes are already under way.

The environmental review of the existing facilities identified several issues, which need to be addressed. The major concerns for most of Hortex's plants are the proposed future gaseous emission limits for 1998. Some of the plants have compliance problems with the permissible level of liquid effluents discharge, particularly during the peak processing period. Two of the plants have some problems with compliance with noise levels at the site boundary due to proximity to residential buildings.

The issues identified by the environmental review will be addressed through the implementation of an Environmental Action Plan (EAP), which has been agreed with the company and included in the Capital Expenditure Programme. The investments, most of which are already under way, will include: conversion to natural gas or oil-fired boilers; completion or upgrading of waste-water treatment facilities; and the implementation of noise abatement measures, such as installation of a sound absorber barrier and a new evaporative condenser on the ammonia system. As part of the improvement of corporate governance, Hortex will also be required to develop, adopt and implement a corporate Environmental Management System. Investments proposed under the restructuring programme will ensure compliance with all current and future environmental standards and regulations, including those resulting from the harmonisation process with the European Union.

The company will be required to report annually on environmental, health and safety matters including progress on implementation of the Environmental Action Plan and compliance with the relevant regulations.

Technical Cooperation

None

Company Contact

 

Business opportunities

For business opportunities or procurement, contact the client company.

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