CHUMAK

Location:

Ukraine

Project number:

32695

Business sector:

Agribusiness

Notice type:

Private

Environmental category:

B

Target board date:

08 Jun 2004

Status:

Completed

PSD disclosed:

23 Apr 2004

Project Description

The proposed project comprises investments in the Borrower’s edible oil business to increase crude oil extraction capacity and efficiency, financing of other minor capital expenditures or investments in the Borrower’s facilities during 2005, working capital, brands and in marketing; and sun-flower seed purchase at harvest for store and own processing throughout the season.

Transition Impact

As the level of industrial foreign investment in the food sector in Ukraine is still relatively low, the transition impact potential for this investment remains substantial, comprising:
• Expected enhancement of linkages with farmers (increased procurement, training and mediating with suppliers of farming inputs) as well as increased number of suppliers.  Farmers will increasingly be able to use supply contracts with Chumak to obtain much needed bank financing.  
• Innovative packaging and product development will also have an influence with retailers and distributors and carry a potential of substantially raising the industry standards.
• The investment will continue to support improvement of local managerial skills and know-how both within the company (new production techniques, products) and with its suppliers and clients (including dispersion of new sowing methods, harvesting techniques, new varieties of seeds, ultimately leading to higher yields).
• The Project will lead to cost reduction and optimisation as well as improvement of quality of Chumak’s oil products. New high quality products will ultimately increase consumers’ choice of packaged branded products in line with best practice industry standards.

The Client

Chumak, a joint stock company registered in Nova Kakhovka, Ukraine, a leading manufacturer of branded food products such as edible oil, ketchup, tomato-based sauces, mayonnaise and pickled vegetables.

EBRD Finance

US$ 10.0 million term loan and US$ 5.0 million revolving credit line.

Project Cost

Up to US$ 23.9 inclusive of parallel loans from local banks.

Environmental Impact

Screened B/1. The Bank has received an independent review of environmental information provided by the Company.  This review indicates that there are no major environmental issues associated with the facility.  Further environmental studies are being undertaken by the same consultants and will result in the development of an environmental action plan (EAP) to ensure that the Company meets national and EU standards for environment, health and safety.  The Company will provide the Bank with an annual environmental report on the implementation of the EAP.

Technical Cooperation

None.

Company Contact

Carl Sturen CEO, 
Kozatska str. 3, 
Kahovka Cherson Reg.,
74800 Ukraine
Tel. +38 0552 326 000
 

Business opportunities

For business opportunities or procurement, contact the client company.

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