CONSUMERS SKLO ZORYA

Location:

Ukraine

Project number:

31654

Business sector:

Manufacturing and Services

Notice type:

Private

Environmental category:

B

Approval date:

18 Mar 2003

Status:

Completed

PSD disclosed:

12 Feb 2003

Project Description

The transaction envisages support of CSZ’s investment program, which aims to increase CSZ glass plant production capacity and sales to existing customers. The project would put into operation a new (2nd) furnace, an additional set of forming lines, and upgrade the existing equipment.

Transition Impact

The proposed project will further strengthen the transition impact that CSZ has already had in the glass container industry and in end-user sectors. The glass container industry is modernising, consolidating and becoming more efficient as it seeks to emulate CSZ’s performance. This is putting increased pressure on CSZ to further improve its efficiency to maintain its lead – the underlying rationale for the proposed project. There is growing industry awareness that reaping the rewards of modernisation, as CSZ has done, and raising investment financing for modernisation, require transparent and reliable management information systems, in turn linked to sound corporate governance practices. CSZ has demonstrated and will continue to demonstrate the rewards from adopting technology, manufacturing controls and business management skills and practices that allow raw materials and energy to be used considerably more efficiently. The increasing availability of modern lightweight glass containers at lower prices has been stimulating and expanding end-user demand. It has done much to revitalise access of Ukraine’s food processors and beverage producers to traditional export markets. It has allowed producers to begin to compete head-on with foreign imports in the domestic market. It has also allowed them to introduce more efficient, high-speed filling lines and modern closures (tops/caps).

The Client

Consumers Sklo Zorya (the “Company” or “CSZ”), a closed joint stock company incorporated in Ukraine. CSZ is Ukraine’s leading manufacturer of premium-quality glass containers with a domestic market share by volume of 19% in 2001 and in 2002.

EBRD Finance

US$ 13 million term loan to finance part of the Company’s capital expenditures for new glass making equipment.

Project Cost

US$ 20 million.

Environmental Impact

The project was screened B/1, requiring an environmental audit and an environmental analysis of the impacts associated with the expansion program. Audit information was provided through due diligence performed and through annual environmental reports submitted to the Bank. The Bank contracted Continental Glass Engineering firm from Germany, which undertook the environmental analysis as part of their technical due diligence on the expansion program following a separate Terms of Reference provided by the Bank. A number of potential environmental issues were identified including air emissions from the batch plant, furnace and annealing plant, effluent emissions contaminated with oils and solids and noise emissions. Mitigating measures have been proposed and will be incorporated into an updated environmental action plan once CSZ has finalised the specifications for the new equipment to be installed under the expansion program. Existing facilities already comply with both national and EU standards and the expansion program is designed to comply likewise with these standards.

Technical Cooperation

None.

Company Contact

Robert Reeves, Chief Executive Officer
Email: rreeves@sklozorya.com 
Stanislav Savinsky, General Director
Email: gdir@sklozorya.com
 

Business opportunities

For business opportunities or procurement, contact the client company.

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