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EBRD provides equity funding to Axereal cooperative

By Axel  Reiserer

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The EBRD is supporting the expansion and intensification of Axereal’s activities in the agribusiness sector of central and south-eastern Europe. The Bank is providing Axereal with €10 million in equity and a €28 million loan as working capital focused on improving the grain handling infrastructure in the region.

The portage equity investment will be used to finance the acquisition of new silo units in Serbia, Croatia and Romania, while the loan will be used for the stable procurement of grains and seeds from the region.

Coopérative Axereal is the first grain collector in France and the fifth-largest malt producer in the world. Axereal has been present in central and south-eastern Europe since 2001, steadily expanding its activities. Today, the company is active in Croatia, Hungary, Romania and Serbia, with nine companies engaged in grain collection, grain trading, seed operations and malting.

The EBRD’s financial package will be targeted at helping Axereal foster and use the potential of the region’s agribusiness sector. New silos will increase operational efficiency by reducing waste and enabling more advanced storage and distribution techniques. This will permit an increase in the quantity of grain handled, which is expected to rise from 344,000 tonnes in 2011-12 to up to one million tonnes in 2016-17. The company also has a longstanding track record in creating successful upstream linkages with the farming sector.

Phil Bennett, EBRD First Vice President, said: “We are pleased to join forces with Axereal and today’s agreement demonstrates our joint commitment to bring the region’s potential to fruition in a competitive environment. The EBRD funding will support the expansion of much-needed silo capacity and increase access to pre-financing and the provision of inputs to farmers. The growth of storage facilities will also enlarge the infrastructure base for farmers and cover a larger cultivated area in Romania and Serbia – two countries where agribusiness is a key sector.”

Philippe de Raynal, CEO of Axereal, added: "In central and south-eastern Europe we are leveraging our longstanding experience in France, where we used an economic model that takes into account the whole supply chain, from seed to customer. We greatly appreciate the EBRD’s support for our programmes in seed production, input sales, grain collection and storage, logistics and trade in a region with a rich agricultural tradition centered around the Danube river.”

Gilles Mettetal, EBRD Director, Agribusiness, emphasised that the “investments planned by Axereal will help develop ties – including the transfer of expertise – between local agricultural communities in central and south-eastern Europe and farmers in western Europe. The investments will also improve efficiency through the development of regional platforms for grain handling.”

To date, the EBRD has invested more than €7 billion in more than 450 projects in the agribusiness sector in the countries where it works. The Bank’s involvement includes all activities throughout the production chain, from farming, processing and trading to food distribution, packaging and retail. The EBRD also plays a major role in developing the sector by supporting local and foreign corporate clients as well as micro, small and medium-sized enterprises.

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