Industrial Milk Company

Location:

Ukraine

Project number:

48138

Business sector:

Agribusiness

Notice type:

Private

Environmental category:

B

Target board date:

25 May 2016

Status:

Complete

PSD disclosed:

02 Mar 2016

Translated version of this PSD: Ukrainian

Project Description

The EBRD is considering a senior secured loan to Ukrainian agro holding Industrial Milk Company (IMC, or the Group) to finance working capital needs of the Group's farming operations in Ukraine.

Transition Impact

The transition impact potential of the proposed project will derive from:

1) Demonstration of new replicable behaviour and activities. The Group is launching a number of initiatives aimed at improving efficiency through the implementation of advanced farming techniques, and input optimisation.

2) Transfer and dispersion of skills in relation to "teach the teacher-training" at local universities, internships and professional development programmes.

Client Information

IMC is a publicly traded integrated agricultural group engaged in grain and oilseeds farming, storage, and processing, potato production, and dairy farming. The Group operates in Chernihiv, Sumy, and Poltava regions in Ukraine.

EBRD Finance Summary

USD 20,000,000.00

Total Project Cost

USD 80,000,000.00

Environmental and Social Summary

Industrial Milk Company

Categorised B (ESP 2014): The provision of working capital finance for crop and dairy farming operations is associated with moderate and site-specific impacts.

ESD has undertaken environmental and social due diligence (ESDD) including an environmental and social audit of a range of facilities covering elevators, farms, grain and chemical materials storage facilities and repair & maintenance centers.  ESDD has confirmed that the Company generally meets requirements of the local E&S legislation and has an E&S structure in place to deliver the Project in compliance with EBRD Performance Requirements.

The major issues identified during ESDD that require mitigation measures include inconsistent implementation of the E&S management system throughout the company, lack of proper risk assessment and safety supervision of the operational activities as well as incident registration, improper chemical materials management and non-compliance with EU dust emissions.  

A number of recommendations were formulated into an Environmental and Social Action Plan (ESAP) covering a number of areas from the improvement of the current corporate E&S management system to more site-specific actions. These include, amongst others, improvement of the corporate E&S management system, fire and explosion preventive safety measures, improvement of the hazardous materials management, reduction of the dust emissions, animal welfare improvements. It also included a gender component with regards to the internship to be awarded to female students.

Particular attention has been paid to animal welfare. A detailed audit of all animal farming facilities has been conducted by an independent consultant based on the analysis of ‘five freedoms’ (freedom from hunger, thirst and malnutrition; freedom from fear and distress; freedom from physical and thermal discomfort; freedom from pain, injury and disease; and freedom to express normal patterns of behavior) and in line with the requirements of both Ukrainian and EU regulations for animal welfare. The audit has found that IMC is generally in compliance with the standards, with some minor deficiencies that include insufficient freedom of movement and shelters to protect animals from weather conditions. An Animal Welfare Action Plan has been developed and accepted by the Company to include, among others: daily animal welfare indicators recording system, instrumental assessment system of microclimate in the barns, improved conditions for maximum motion of animals in the outdoor exercise sites, including additional and emergency lighting systems, introduction of the loose housing system, innovative approach to feeding by means of general-mixed feed ration, voluntary animal welfare inspections by external state veterinary authorities, additional trainings and practical skills development for animals handlers.

The ESAP has been accepted by the Client.

The Project will be monitored by the Bank on an annual basis through the Annual Environmental and Social Reports.

Technical Cooperation

EU funds from the Neighbourhood Investment Facility (NIF) for resource efficiency audit.

Company Contact Information

Yulia Andrushkina
y.andrushkina@imcagro.com.ua
+380 44 365 14 62
www.imcagro.com.ua
119x Lobanovskyi Valerii Avenue Kyiv, 03039, Ukraine
 

Business opportunities

For business opportunities or procurement, contact the client company.

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Email: procurement@ebrd.com

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