SPEARHEAD INTERNATIONAL

Location:

Regional

Project number:

17292

Business sector:

Agribusiness

Notice type:

Private

Environmental category:

B

Approval date:

01 May 2001

Status:

Complete

PSD disclosed:

10 Apr 2001

Project Description

Proposed debt financing to Spearhead International Limited to be used for the development of its assets in Poland and the Czech Republic to allow the company to become a low-cost, value-added supplier of food to key multinationals operating in the region.
The project will allow Spearhead to respond to food supply bottlenecks in the Polish and Czech markets. This will be achieved by:
  • providing seed-to-shelf product traceability for products delivered to international processors’ and retailers’ specifications;
  • farm re-equipment and refurbishment that will allow for more advanced farming techniques to be applied, resulting in yield improvements;
  • establishing a large-scale potato growing business via investment into state-of-the-art storage facilities;
  • establishing joint ventures in the Czech Republic with market leaders in their niches addressing vegetable supply;
  • increasing milk yields by investing in herd improvements.
 

Transition Impact

The project would have a positive impact on the transition process in a number of ways.
  • Support for the development of a key economic sector – The proposed project enables the Bank to directly support the development of large-scale agriculture in first-tier EU accession countries with a sponsor that is a market leader in its sectors in the United Kingdom. The size and visibility of Farmwealth in Poland, through its long-lease ownership of Glubczyce, will provide a very strong demonstration effect to the farming community in Poland of the benefits to investment, scale, high standards and customer focus. Farmwealth is already seeing this effect in the region where the Polish farm is located.
  • Transfer of skills – Spearhead’s approach to the development of its Czech and Polish assets is based on the transfer of the management and technical skills that have enabled Greens to become a successful and significant operation in the UK.
  • Improved quality in the domestic supply of locally grown produce – Both processors and food retailers and ultimately consumers will benefit from the increased supply of good-quality produce packed locally at a competitive price.
  • Supply chain improvement – By supporting this project, the EBRD would assist the creation of an efficiently functioning domestic supply chain in the fresh produce sector. This can provide significant benefits, including displacement of imports, improved quality and better priced products for the consumer and reduced logistics and inventory costs for processors and retailers.

The Client

Spearhead International Limited incorporates Farmwealth Limited, which operates in Poland (via Top Farms) and the Czech Republic (via Eurofarms), and Greens of Soham, a UK operation. Farmwealth’s major asset is the 12,000 Ha Glubczyce farm in south-western Poland. Greens of Soham is an expanding UK food supplier that has moved successfully into value-added niches.

EBRD Finance

Loan of up to €12 million to be lent to operating subsidiaries Top Farms Sp.z.o.o, Top Farms Glubczyce Sp.z.o.o and Eurofarms s.r.o.

Project Cost

Project cost of the development is approximately €20 million.

Environmental Impact

The project was screened B/1, requiring an environmental audit and environmental analysis. These studies were conducted by independent consultants, and the results confirm that, to a large extent, the operations of Top Farms and Eurofarms comply with both national and European Union environment, health and safety standards. There are some areas that require improvement in order to reach full compliance with such standards. The required actions will be formalised in an environmental action plan that will be agreed with Farmwealth. In the medium and long term the environmental impact of Spearhead’s investment should be substantial through the transfer of Western best practice, including better handling of waste material, large-scale redevelopment of buildings and better soil and chemical management. A proposed project to create a reservoir at Glubczyce as part of a regional down-stream flood protection scheme will give Farmwealth valuable irrigation rights as well as the possibility to create a wildlife/leisure reserve, similar to a reserve created by Greens in the United Kingdom.
 

Technical Cooperation

None.

Company Contact

 

Business opportunities

For business opportunities or procurement, contact the client company.

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Email: procurement@ebrd.com

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