Beohemija

Translated version of this PSD: Serbian

Project Description

The EBRD is considering providing a loan of up to €68 million to a leading Serbian home-care and beauty products producer Beohemija d.o.o. to support the company’s further development and financial restructuring of its balance sheet.

Transition Impact

When approved by the EBRD’s Board of Directors, the project is expected to have the following transition impact:

(i) Demonstration of successful restructuring of a leading company in the chemical sector in Serbia. This is going to be achieved through operational and technological restructuring in order to improve productivity, energy efficiency and environmental safety.
The new production lines will use the latest technology from well-known producers, efficient in cost management and entailing significant energy savings. The Project will therefore provide a showcase to others in the market on how to be financially successful and energy efficient

(ii) Setting high standards of corporate governance and business conduct through improvements in financial reporting and environmental performance. The Company will take steps towards improving its accounting systems as well as environmental and labour protection practices and as a result will set standards in the local chemical sector.

Beohemija and its subsidiaries will be required to introduce IFRS accounting, apply the EBRD’s environmental standards and implement an Environmental Action Plan. This is particularly important for a company operating in the Serbian chemical sector, where most companies have still not implemented the best available practices and EU standards.

The Client

Beohemija d.o.o. is an entirely locally-owned and operated company with a 20-year track record in the regional home-care and more recently beauty products market. The Company’s output is currently sold in eight countries of South-Eastern Europe and the Western Balkans.

EBRD Finance

Up to €68 million syndicated senior secured loan to Beohemija d.o.o. The loan will comprise of:

• €20 million loan for the account of the Bank; and
• €48 million loan for the account of participating banks.

Project Cost

€68 million

Environmental Impact

Environmental classification and rationale

The project is Category B. The project includes providing capital expenditure for improving production efficiency, modernisation and storage capacity enlargement and working capital at a company who manufactures and distributes household cleaning products and beauty/personal hygiene products. The environmental and social risks associated with such operations are site specific issues, which can be readily identified, assessed and mitigated through measures as defined in the Environmental and Social Action Plan.

Due diligence

Due diligence is being carried out on the Company operations by means of site visits and discussions with management around policies, procedures and performance against environmental and health and safety regulations; and the corporate activities undertaken with regard to stakeholder engagement. The Company has three main production facilities and due diligence is focussing on current and historical performance at these sites.

Environmental and Social Action Plan

The Company will be required to adhere to the Bank’s PRs. Specific actions identified during due diligence as being required to bring operations into compliance with the PRs will be included within an Environmental and Social Action Plan which will be agreed with the Company.

Monitoring and reporting

The Company will monitor the environmental impact of its operations in accordance with national law and regulations. The Bank will evaluate the project's compliance with the applicable environmental and social requirements during the lifetime of the project by reviewing annual environmental reports prepared for the project.

Technical Cooperation

None.

Company Contact

Beohemija d.o.o.
Ms. Sanja Rajković Jovanovic – PR manager
e-mail - sanja.rajkovic@beohemija.com

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