US$ 2.8 million loan will help company launch quality potato chips production
The European Bank for Reconstruction and Development (EBRD) is boosting its support for private sector development in Turkmenistan by helping one of the leading companies expand its product line.
A US$ 2.8 million loan will help Berk group, a successful brewer, to expand into the segment of salty snacks, which will complement its core business.
Already a leading producer on the Turkmen beer market, Berk hopes to also become a frontrunner in potato chips production in the country, where most chips (crisps) are currently imported. Berk aims to win the market by matching the quality of European brands with competitive pricing.
The loan will finance the purchase of state-of-the-art production equipment for the company’s greenfield production site just outside Ashgabat. The EBRD’s Advice for Agribusiness programme provided grant resources to engage two consultants, one to advise the company on production equipment and processes and the other to advise on the selection and storage of potatoes, the key raw material.
The EBRD previously supported the expansion of Berk’s brewery operations by providing financing to expand production technology and capacity, allowing Berk to grow its product line. With the new project Berk will diversify its operations and take advantage of synergies along the distribution chain for both beer and snacks.
Engin Goksu, EBRD Head of Office in Ashgabat, said: “The cooperation between Berk and the EBRD is an example of a fruitful partnership. It is pleasing to see how successfully Berk has grown over the last six years with EBRD support. The production of snacks is a new segment not only for the company but for the Turkmenistan market in general. I am glad that the EBRD was able to support the company in this step not only financially but also with extensive technical advice, which played an important role in making this project possible.”
This investment is the first EBRD transaction co-financed by the International Cooperation and Development Fund (TaiwanICDF) through their contribution to EBRD’s Financial Intermediary and Private Enterprises Investment Special Fund. In 2015, TaiwanICDF signed a US$ 15 million contribution agreement to provide debt financing to agribusiness companies in eligible countries. This co-financing instrument is already proving successful in mobilising funding to support SMEs across the EBRD region.
To date, the EBRD has invested €240 million into various sectors of the economy of Turkmenistan. Most of the Bank’s clients in the country are privately owned small and medium-sized businesses.