The European Bank for Reconstruction and Development (EBRD) is extending a US$5 million loan to Toprak, a leading manufacturer of cardboard packaging in Turkmenistan. The loan proceeds will finance construction of a greenfield paper-making facility that will produce cardboard from recycled paper. The new mill will be the first private paper recycling facility in Turkmenistan.
Toprak is the largest producer of cardboard boxes and other containers in the country. It supplies a range of cardboard packaging products to around 130 clients in diverse sectors of the Turkmen economy, from textiles to food, chemical and other industries. The company’s first major expansion, in 2010, was partially financed with a US$ 1.5 million loan from the EBRD, which funded the purchase of a new automated folding line.
The new facility will be capable of producing up to 25 tonnes of paper per day. Toprak plans to sell a third of this output and use the remaining two-thirds for its cardboard packaging production. Producing its own cardboard from recycled waste paper will significantly reduce Toprak’s reliance on imported cardboard. The venture will also have an environmental impact, reducing pollution and recycling waste paper which would otherwise be burnt. The company plans to promote paper recycling in major Turkmen cities.
“The EBRD’s main priority in Turkmenistan is to support the private sector, and we continue to provide assistance and financing to local manufacturers. This loan will enable our existing client Toprak to integrate its production cycle by using modern recycling technologies and know-how,” said Frederic Lucenet, The EBRD’s Director for Manufacturing and Services.
In addition to the loan, the EBRD also provided the company with technical cooperation for legal and technical due diligence. The Bank also funded consultancy services from international experts, as there are currently no local experts in the cardboard and paper industry.
Since the start of its operations in Turkmenistan in 1994, the EBRD has invested over €177 million across 41 projects in various sectors of the Turkmen economy, mobilising an additional €470 million from other sources of financing. Ten of those projects were in the manufacturing and services sectors.