Vestel 2 - White Goods Production

Location:

Russia

Project number:

35958

Business sector:

Manufacturing and Services

Notice type:

Private

Environmental category:

B

Approval date:

26 Jul 2005

Status:

Completed

PSD disclosed:

20 Jun 2005

Project Description

The proposed project envisages provision of a long term debt financing to Vestel CIS to construct and operate a white goods (automatic washing machines and refrigerators) production facility.

Construction will involve erection of a new production building, several auxiliary infrastructure buildings and warehouses, and two assembling lines for automatic washing machines and refrigerators. The new plant will have a total production capacity of 500,000 units of washing machines and refrigerators per year. This capacity will be increased to 1 mln units each, subject to the market demand. The plant will be located on the same site as the existing Vestel CIS’ TV plant in Alexandrov, Vladimir region of Russia.

 

Transition Impact

With its investment the Bank will support a committed strategic investor who has demonstrated its ability to successfully build and operate a modern TV sets production facility in a very competitive market. The Project will foster market efficiency and higher standards in the white goods industry as western quality products will become available at lower prices. This will prompt domestic producers to adapt to a more competitive market environment, it will also put pressure on new foreign entrants who are planning to set up local production in the near future. The Project will play a positive role in setting corporate governance and business standards in the industry which still has a large share of “grey imports”. The Company will follow best industry practices in terms of production facilities, quality control, distribution and marketing.

Further positive impact will be achieved by widening the Vestel CIS’s product mix and transferring skills to local employees, who will be trained to operate and maintain modern production equipment, as well as will acquire skills and know-how in the areas of management, quality control and marketing. The Project is expected to promote development of supplier industries, such as domestic component manufacturing.

 

The Client

Vestel CIS Ltd., a Russian company, the Bank’s existing client which owns and operates a television set production facility in Alexandrov. The Company is wholly-owned by Vestel Electronik Sanayi Ve Ticaret A.S., a leading Turkish integrated consumer electronics and white goods manufacturer.

EBRD Finance

USD 28 million long term senior loan.

Project Cost

Up to USD 80 million spread over several years.

Environmental Impact

The project was screened B/0.

The Environmental Analysis, which included a site visit by the Bank’s Environmental Specialist, confirmed that the Company’s operations are of the highest international standard and Vestel has developed a comprehensive environmental management system and capacity (ISO 14001) and management system for occupational health and safety (BS 8800). The facility has all necessary environmental permits in place; fire protection and fire control are of a high standard; there is no dangerous machinery or hazardous materials present, and all soldering machines have local exhaust ventilation in place. The environmental investigations also confirmed that a new wastewater treatment will be constructed and that the development of the white goods facility will be in accordance with both local/national legal requirements and good international/EU standards.

Technical Cooperation

None.

Company Contact

Vestel CIS
16 Gagarina St., Alexandrov
Russia

General Director: Ali Tunc Can

 

Business opportunities

For business opportunities or procurement, contact the client company.

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Email: procurement@ebrd.com

General enquiries

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Email: projectenquiries@ebrd.com

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Text of the PIP

Independent Project Accountability Mechanism (IPAM)

If efforts to address environmental, social or public disclosure concerns with the Client or the Bank are unsuccessful (e.g. through the Client’s Project-level grievance mechanism or through direct engagement with Bank management), individuals and organisations may seek to address their concerns through the EBRD’s Independent Project Accountability Mechanism (IPAM).

IPAM independently reviews Project issues that are believed to have caused (or to be likely to cause) harm. The purpose of the Mechanism is: to support dialogue between Project stakeholders to resolve environmental, social and public disclosure issues; to determine whether the Bank has complied with its Environmental and Social Policy or Project-specific provisions of its Access to Information Policy; and where applicable, to address any existing non-compliance with these policies, while preventing future non-compliance by the Bank.

Please visit the Independent Project Accountability Mechanism webpage to find out how to submit a Request for review through our confidential online form, by email, mail or telephone. IPAM is available to discuss your concerns and answer any questions you may have about the submission or handling of Requests, which follow the Project Accountability Policy and Guidance. Requestors’ identities may be kept confidential, upon request.

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