The EBRD will provide a long-term loan up to EUR 50 million to Sutas Group. The loan will support the Company’s investment programme including a regional expansion through construction of two integrated milk and milk processing facilities including: feed plants, breeding farms, practice farms, educational centers, milk processing plants, reclamation facilities and animal waste power plants in Western and Eastern Turkey as well as capex investments of the existing plants and the provision of working capital for the subsidiaries in FYR Macedonia and Romania.
Specific transition impact objectives will be drawn primarily from the following areas:
Transition impact is expected to derive from market expansion through backward and forward linkages, especially in Eastern Turkey where modern dairy farming is underdeveloped and consumers' access to high quality dairy products is limited. The company will expand the supplier base, providing farmers with access to modern dairy value chains, complemented by technical assistance to improve milk output.
Also, through expansion of the distribution network, consumers in the region will be able to benefit from improved access to high quality fresh milk products with increased food safety characteristics. In addition, the new Sutas plant is expected to create economic opportunities for local dairy farmers in the region by improving their access to market and related distribution networks for their products and by offering training opportunities to improve product quality and business management skills. In this way the project will help to address regional gaps in Turkey.
Sutas was founded in 1975 in Karacabey, Bursa by the Yilmaz Family, as a simple cheese manufacturing company and is now one of the leading dairy companies in Turkey. The Company employed 3,284 employees as of 2012 year-end.
Up to EUR 50 million.
Up to EUR 50 million.
The Project has been Categorised B in accordance with the EBRD’s Environmental and Social Policy whereby impacts are likely to be site specific, readily identifiable and addressed through mitigation measures.
An independent international firm of environmental & social consultants has been appointed by the EBRD to undertake due diligence of the sponsor and the proposed Project which included a site visit, management interviews and document review in August 2013.
The proposed project is being appraised against the EBRD’s requirements, including inter alia national and EU legislative requirements and international best practice. Potential impacts associated with all phases of the proposed project are being assessed.
Where potential issues are identified during the due diligence exercise time-bound corrective actions will be required to be actioned by the company. Any such works will be formally agreed with the company through an environmental & social action plan and the performance of the sponsor and the Project will be monitored throughout the lifetime of the loan.
This section of the PSD will be updated following the completion of due diligence and agreement of the ESAP.
Burak Ozturk, Finance Coordinator
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