EBRD supports Kazakh beverage and food producer, RG Brands, with US$ 25m loan

By Svitlana  Pyrkalo
@pyrkalo

The European Bank for Reconstruction and Development (EBRD) is providing a US$ 25 million loan to RG Brands in Kazakhstan. The loan, which is available both in tenge and US dollars will support the company’s growing working capital needs to purchase raw materials and expand its presence in Kazakhstan and neighbouring countries.

RG Brands is one of the leading fast moving consumer goods (FMCG) producers in Kazakhstan, with a wide and diversified product portfolio of juice and nectars, water, soft drinks, iced tea, UHT milk, packaged tea and snacks. RG Brands has four production plants in Kazakhstan. Since its inception in 1994, the company has established an exclusive bottling partnership with PepsiCo and Pepsi Lipton, and has developed a range of its own strong local brands.

Now the company wants to enhance its capital structure and expand its presence in Kazakhstan and neighbouring Central Asian countries, especially in the Kyrgyz Republic, where it already has a distribution network. The proceeds of the loan will also be used to provide some pre-financing to local farmers, which will mean a more secure supply of raw materials, from milk to fruit concentrate, to potatoes.

Signing the deal in Almaty, the EBRD Director for Kazakhstan, Janet Heckman, said: “The EBRD believes Kazakhstan has a great potential as a food producer and exporter. RG Brands is one of the companies with the know-how. Having successfully worked with Pepsi Cola and Lipton as a franchise, the company developed a range of its own strong local brands which have since become local favourites, and we are proud to work together on further expansion of the Company’s presence in Kazakhstan and the neighbouring Kyrgyz Republic”.

The Chairman of the Board of RG Brands, Kairat Mazhibayev, said: “The shareholders and management board of RG Brands are very pleased with the continuation of the strong relationship with the EBRD and the further extension of their financial support and commitment. The working capital facility of US$ 25 million will further enhance the company’s mid-term plans to develop the food and beverage markets within Kazakhstan and neighbouring regions, providing long-term benefits to local business and consumers.”

In 2008 the EBRD financed a greenfield production plant in Almaty, which is now RG Brands’ largest production facility.

To date, the EBRD has invested approximately €5 billion (US$ 6.6 billion) in more than 160 projects, mobilising around €7 billion (US$ 9.3 billion) for these projects from other sources of financing.