Efes Kazakhstan Expansion

Location:

Kazakhstan

Project number:

37725

Business sector:

Agribusiness

Notice type:

Private

Environmental category:

B

Target board date:

02 Apr 2007

Status:

Completed

PSD disclosed:

27 Feb 2007

Project Description

The proposed project will allow Efes Karaganda Brewery JSC to increase brewing capacity, infrastructure facilities and marketing assets of the existing plants in Almaty and Karaganda. The investment program will help satisfy increasing beer demand in Kazakhstan and will help Efes to increase its market share. 

Transition Impact

Introduction of greater competition/market expansion

The Company plans to increase sales volume significantly through strengthening and further expansion into premium market segments. With the market being dominated by few players this will stimulate competitive pressures on other breweries to price more competitively, at more reasonable terms for distributors and also to improve marketing strategy and branding of their products.

Demonstration of improved of business standards

Through the interaction with other parts of the food chain (e.g. malteries), extension of the existing capacity, an increase in Efes Kazakhstan presence in the market with a difference from other market players, the Project will create a wider choice spectrum for the Kazakh consumers and offer better hygienic standards for beverage packaging and increased shelf life.

 

The Client

Efes Karaganda Brewery JSC, incorporated in 1996, is one of the leading beer producers in Kazakhstan. It operates two plants in Karaganda and Almaty. The Company is a 100% owned subsidiary of Efes Breweries International N.V (or ‘EBI’), one of the largest beer producers in the Eurasian region, active in Russia, Kazakhstan, Serbia, Moldova.

EBRD Finance

Equivalent of USD 80 million senior loan of which USD 24 million for the account of participant banks.

Project Cost

USD 130 million.

Environmental Impact

Screening category and justification

Screened B/1. The project involves investments at two existing breweries located in Karaganda and Almaty in Kazakhstan. An Environmental Audit of the two facilities and an Environmental Analysis of the proposed investments has been undertaken as part of the due diligence.

Due diligence undertaken and outcomes

An environmental due diligence was undertaken of the project by the Bank, inclusive of site visits to both breweries. A comparison was made of the current performance with international Key Production Indicators (KPI's) for the sector.

The environmental due diligence of the production sites and facilities undertaken did not identify any major issues and the plants are currently in compliance with National legislation. The main environmental issue relates to use of resources and the need to further reduce the level of energy use, as well as water and wastewater generated per hecto liter of beer. The Company is in the process of energy efficiency driven investments which will significantly reduce the energy, water and wastewater per hectolitre (hl) of product in line with best international practice. The modernization of the brewing process in Karaganda will also allow the utilization of spent grain for agricultural purposes. Long term strengthening of environmental management systems and further efficiency gains are required, inclusive of a preliminary wastewater treatment plant at Karanganda. An environmental action plan (EAP) is being developed to address the less significant issues at the production sites.

Implementation requirements

  • Efes will be required to provide the Bank with an annual environmental report, including updates on the EAP, and notification on any material accidents of incidents.

  • The investment programme will aim at reducing resource use per hl of product to ensure that the plant attains similar Key Production Indicators (KPI's) as similar breweries in Turkey.

  • The Company will conduct its business with due regard to National and EU environmental regulations and standards.

  • The Company will arrange for periodic environmental audits and monitoring visits by Bank staff or appointed representatives, if and when deemed necessary.

Technical Cooperation

None.

Company Contact

Tolga Mengi, Finance Director
Efes Karaganda Brewery JSC

Tel: +7 (7272) 96 25 62
Fax: +7 (7272) 95 29 91

 

Business opportunities

For business opportunities or procurement, contact the client company.

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