EBRD finances expansion of FoodMaster, a leading dairy company in Kazakhstan

By Svitlana  Pyrkalo
@pyrkalo


Kazakhstan is the only country where leading global dairy company Lactalis owns and operates dairy farms.

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Tenge loan equivalent to €15 million will fund dairy plant upgrade, new cow stalls and distribution assets

The European Bank for Reconstruction and Development (EBRD) is supporting a new project in agriculture and food production in Kazakhstan, in line with the Bank’s commitment to promote private sector participation in agribusiness.

The EBRD will provide a loan of up to €15 million equivalent in tenge, the local currency, to FoodMaster, one of the leading dairy producers in Kazakhstan, an affiliate of Lactalis, the largest dairy products group in the world.

FoodMaster will use the EBRD loan to upgrade its three dairy processing plants, to construct new cow stalls and make other investments in its two dairy farms, as well as increasing its fleet of trucks and financing working capital needs. This investment programme will enable FoodMaster to increase the output and quality of locally-produced dairy products in line with best international practices, making a wider range of dairy products available to customers in Kazakhstan.

FoodMaster was acquired by Lactalis, the world’s largest raw milk collector and cheese processor, in 2004 and since then has grown to be one of the leading companies in Kazakhstan. It is also the only place in the world where Lactalis owns and operates dairy farms in addition to collecting milk for further processing.

Signing the project during his visit to Astana this week, the President of the EBRD, Sir Suma Chakrabarti, said: “Exactly a year ago in Astana, I announced that the EBRD would increase funding of the strategic agribusiness sector in Kazakhstan at the Foreign Investors Council which had agriculture as its theme. I am very pleased that today we are announcing our first project in the dairy sector in Kazakhstan.”

Gilles Mettetal, Director for Agribusiness and Acting Head of Industry, Commerce and Agribusiness at the EBRD, added: “We are very proud to support Lactalis, well known for its iconic brands such as President, in its work to increase the supply of high value-added dairy products to Kazakh consumers along the entire value chain.”

Arman Aldabergenov, General Manager of Lactalis - FoodMaster Kazakhstan, said: “This project is very important for our company. In line with Lactalis Group’s worldwide policy, all investments will continue to be directed into the development of our milk collection points, modernisation of all three plants which are currently the most modern dairy production sites in Kazakhstan, and quality control system at all stages from farm to retail. All these steps have one goal: to provide our consumers with high quality dairy products produced from raw milk and to grow Lactalis dairy products’ competitiveness.”

In addition to entering the Kazakh dairy sector as a financier, the EBRD is also providing professional know-how. Together with the Food and Agriculture Organization of the United Nations (FAO), the EBRD has initiated a technical cooperation programme with private sector companies to improve milk production and collection and thus boost raw milk supply and the quality of dairy products in Kazakhstan. The programme will contribute to the transfer of knowledge on animal nutrition, farm management, quality standards and collection systems which will help local dairy producers better connect to milk processing companies. FoodMaster has already started introducing some of the know-how under the programme.

To date, the EBRD has invested over €6.3 billion in Kazakhstan through more than 200 projects in infrastructure, energy, agribusiness, industry and finance. In 2015, the EBRD invested over €700 million in Kazakhstan, of which about €120 million was in the agribusiness sector.