DLF - MILK-PRO LLC

Location:

Azerbaijan

Project number:

35377

Business sector:

Agribusiness

Notice type:

Private

Environmental category:

B

Approval date:

19 Oct 2004

Status:

Signed

PSD disclosed:

08 Sep 2004

Project Description

The proposed project involves the construction of a new dairy processing plant in Baku and also the modernization and upgrade of an existing plant in Goychay, Central Azerbaijan.  As a result, the Company will double its capacity, improve quality and expand its raw material base.

Transition Impact

The Transition impact of the proposed project is expected to be derived mainly from the contribution of the project to the expansion of the dairy sector in Azerbaijan. The Azeri dairy market is characterised by imports of up to 75% and Milk-Pro represents a significant part of the formal, organised dairy sector in Azerbaijan. Its capacity constraints now act as a severe limitation to its ability to expand.  
As well as growth in sales and profitability, the standards of the company and its position relative to other players in the market means that expansion in this context should also have a significant impact on the development of hygienic and quality standards, and on the overall availability of a greater range of consistently packaged and presented dairy products that will be transparently priced for the consumer.  
Milk-Pro is the single largest purchaser of milk in Azerbaijan. This collection activity brings regular cash and dairy farm support services to rural areas that often have no other form of regular cash receipts.  The expansion of the Company will require an increase in the amount of milk collected, by the addition of collection tanks in areas where the Company is not present currently and an extension of the encouragement given to additional farmers to increase milk yields and to improve milk quality.  

The Client

Milk-Pro, a dairy processing company based in Baku, Azerbaijan.  

EBRD Finance

Up to € 5 million, in the form of an equity investment of between € 1.5 million and a loan of € 3.5 million.  

Project Cost

€ 6.3 million.

Environmental Impact

The project is screened B/1 by the Bank requiring an environmental audit of the Goychay facility and an analysis of environmental impacts associated with the construction of the new plant in Baku.  Independent consultants have been retained to undertake these studies which will be completed prior to Final Review of this project.  If necessary, the consultants will structure an environmental action plan to address any issues revealed during the auditing process and to ensure compliance with relevant national and EU standards.  
A more detailed summary of environmental issues will be provided following the completion of due diligence which will be translated and posted locally and as an attachment to this PSD.

Technical Cooperation

Technical co-operation funding will be sought to provide post-investment assistance, including in the areas of production planning, marketing, sales and distribution.

Company Contact

Tair Mamedov, Deputy Director, Finance
Tel: (994 12) 4904554; (994 50) 3222019 (mob.)
 
 

Business opportunities

For business opportunities or procurement, contact the client company.

For state-sector projects, visit EBRD Procurement: Tel: +44 20 7338 6794
Email: procurement@ebrd.com

General enquiries

EBRD project enquiries not related to procurement:
Tel: +44 20 7338 7168
Email: projectenquiries@ebrd.com

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Text of the PIP

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