Kormotech

Location:

Regional

Project number:

51181

Business sector:

Agribusiness

Notice type:

Private

Environmental category:

B

Target board date:

26 Nov 2019

Status:

Passed Concept Review, Pending Final Review

PSD disclosed:

07 Nov 2019

Project Description

The construction by Kormotech Group (Kormotech UAB and Kormotech LLC) of a new pet food production plant in Lithuania and the expansion of pet food production facilities in Ukraine.

Project Objectives

The Project will support Kormotech Group's strategy to expand its operations in Ukraine and other countries.

Transition Impact

Transition impact of the project is expected to stem from the following:

  • Integrated quality: The Bank will support the first cross-border investment of a Ukrainian company, consisting in the construction of a new production facility in Lithuania.
  • Inclusive quality: The Project will also facilitate the expansion of specialised veterinary education across Ukraine to improve employability of young professionals under the Inclusion quality.

Client Information

KORMOTECH LLC

Kormotech is one of the top-3 pet food producers in Ukraine.

EBRD Finance Summary

EUR 10,000,000.00

The provision of a senior secured long-term loan of up to € 10 million.

Total Project Cost

EUR 10,000,000.00

Environmental and Social Summary

Categorised B (2014 ESP). Investments into expansion of the existing and construction of the new pet food production facilities are associated with site-specific environmental and social (E&S) impacts that were assessed via environmental and social due diligence (ESDD). The identified gaps will be mitigated through the implementation of an environmental and social action plan (ESAP).

ESDD was undertaken in-house and included a site visit and EHS audit of the current operational activities, assessment of the proposed Project and corporate EHS management system. Particular attention was paid to labour and safety aspects, resource sustainability, air emissions and consistent application of the Corporate EHS requirements and policies to all operations

It has been established that Kormotech's current operations and E&S management systems are compliant with the national legislation and it has robust EHS management system and the institutional capacity to deliver the Project in line with EBRD requirements. Kormotech is certified in FSSC 22000 and ISO 22000. It's existing E&S management systems ESAP requirements will be extended on the newly established overseas operations.

Some gaps against the EBRD PRs were identified and in order to close them a targeted ESAP has been developed, which includes, inter alia, improvement of the existing E&S management system at all sites, implementation of supply chain and enhanced contractor management, implementation of a grievance mechanism for internal and external stakeholders, and emergency response improvement and further implementation of air emission abatement measures to bring the operations in line with EU requirements. The ESAP has been shared with Kormotech and will be agreed prior to the Board meeting. The Bank will monitor the Project through the review of the Annual Environmental and Social Reports (AESR) and PSD will be updated as required.

Technical Cooperation

TC funds provided by the Japan-EBRD Technical Cooperation Fund to partially cover Project's external legal costs.

Company Contact Information

Kateryna Kovalyuk
kateryna.kovalyuk@kormotech.com.ua
38 (050) 377 61 92
+38 (032) 298 98 39
http://kormotech.com
Kormotech LLC 79041, 73, Heroyiv UPA Str., Lviv, Ukraine

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