TOEPFER WORKING CAPITAL REVOLVING FACILITY

Location:

Ukraine

Project number:

17789

Business sector:

Agribusiness

Notice type:

Private

Environmental category:

C

Target board date:

29 May 2002

Status:

Completed

PSD disclosed:

05 Apr 2002

Project Description

Toepfer, a Hamburg-based group and one of the world's leading agricultural products trading companies, has asked the EBRD to finance the increased volume of its business in Ukraine. The revolving facility will be used by the borrower to originate (i.e., purchase directly from farmers), transport, store and then either export the agricultural commodities or process them on a tolling basis in Ukraine, with the finished goods sold locally or exported.

Transition Impact

The project will inject liquidity directly into the primary agricultural sectors of grain and sunflower-seeds, where Ukraine has a great natural advantage - having probably one of the best natural growing conditions in the world.
 
The farming sector in Ukraine is in an early stage of transition and the project will address two obstacles to transition of the sector, (i) the inefficiency of the primary markets for the origination of agricultural products, resulting in barter transactions, lack of transparency, high volatility and low prices for the farmers and (ii) the lack of trust in a reliable grain warehousing system.
 
The Project will help achieve the transition objectives as follows:
 
  1. Expansion of competitive interactions and linkages to other sub-sectors, e.g. grain warehousing. Toepfer is strongly committed to the reform of the grain storage sector and to the introduction of the Warehouse Receipt legislation and practices. The visible participation of Toepfer will lead to an increase in transparency in the grain origination market, reducing the proportion of barter transactions and helping to get better prices for the primary-agriculture producers, the farmers.
  2. Syndication of this substantial transaction to foreign commercial banks will enhance the visibility and attractiveness of Ukraine to other Western financiers.
  3. Institutional dialogue: In parallel with this project, the Bank has initiated an institutional policy dialogue and signed a Memorandum of Understanding with the Ukrainian authorities regarding creation of the legal framework for this system and related infrastructure. The project will help prepare the ground for introduction of a viable warehouse receipts system in Ukraine.

The Client

Alfred C. Toepfer (Ukraine) Ltd., (the borrower) is a fully owned subsidiary of Alfred C. Toepfer (Rotterdam) B.V. (the sponsor), a member of Toepfer group that has been active in trading agricultural commodities in Ukraine since 1993. The harvest of 2001 showed the potential of Ukraine as a major grain producer. Ukraine is a key country in central and eastern Europe and the CIS for the Toepfer group, a leading agricultural-commodities trader with decades of experience.

EBRD Finance

A revolving credit-line of €90 million (or equivalent in other major currencies) in total. Around €40 million out of the total will be syndicated to commercial banks.

Project Cost

Around €130 million, inclusive of certain parallel loans from local banks and inter-company loans from the sponsor.

Environmental Impact

The project was screened C/0. By nature of its business, the Borrower will not be directly involved in any kind of processing activities, therefore, environmental issues associated with the project are not considered to be significant.

Technical Cooperation

None.

Company Contact

 

Business opportunities

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