Yug Rusi II

Location:

Russia

Project number:

40500

Business sector:

Agribusiness

Notice type:

Private

Environmental category:

B

Target board date:

29 Jul 2009

Status:

Completed

PSD disclosed:

12 Jun 2009

Project Description

The proposed project is a long-term secured, syndicated corporate loan to provide working capital base and to finance selected investments aimed at improving the Company’s competitiveness.

Transition Impact

Transition impact potential would derive mainly from backward linkages to local farmers in southern Russia including supporting local farmers by providing various services to the client’s third party suppliers of agricultural raw materials. Yug Rusi is also expected to ensure the transfer of skills to other industry participants through the use of modern harvesting technology, efficient procurement, collection and storage.

The Client

Yug Rusi LLC (the “Company” or “Yug Rusi”), the holding company of the leading Russian edible oil market player and agricultural commodities trader.

EBRD Finance

Up to USD 150 million secured corporate loan to Yug Rusi and selected subsidiaries of the Company, comprising a revolving working capital portion and a term loan, of which USD 75 million is for the account of EBRD and the remainder to be syndicated to commercial banks under EBRD A/B loan structure.

Project Cost

USD 150 million.

Environmental Impact

  1. Screened B (2008). Any environmental and social issues associated with the proposed use of proceeds might be readily identified, addressed and mitigated through an environmental and social analysis.
     
  2. The environmental and social due diligence was conducted by ESD in June 2009 on the basis of the site visit, interviews with the environmental and HR management, and review of annual environmental reports, environmental and social questionnaire filled by the Company and other pertinent documents and reports.
     
  3. Current activities of the Company are not associated with any significant environmental or social issues. There are some minor occupational health and safety issues that could be easily rectified as well as issues related to the observance of health and safety standards by contractors. Mitigation measures will be developed by ESD, communicated to the Company and agreed upon in the form of an Environmental and Social Action Plan.
  • PR1: Environmental and Social Appraisal and Management: the Company has a major number of procedures that would constitute an efficient Environmental Management System; an ISO 14001 certification for the entire group of companies is pending (it was delayed due to the recent major reorganisation of the Company’s structure). One of the subsidiaries of the Company has already obtained an ISO14001 certification.
     
  • PR2: Labour and Working Conditions: the Company has all necessary occupational health and safety provisions and procedures such as a permit-to work system; procedures for working with electricity; operating vessels under pressure, etc. Every plant has a chief engineer responsible for health and safety issues along with representatives of employees responsible for observance of H&S procedures at each production line and facility. Moderate health and safety issues related to the activity of subcontractors were observed during the site visit. The Company has robust Human Resources Management policy and procedures in place along with a system for collecting and addressing any grievances by employees.
     
  • PR3: Pollution Prevention and Abatement: The Company’s technological process allows them to reduce the use of alkalis and the generation of wastewater and production waste. By-product waste that could be re-utilised is sold to third parties; any other waste is disposed of in compliance with waste disposal permits. The Company also has a waste inventory that allows them to track the volumes and types of generated waste, along with their disposal routes.
     
  • PR4: Community Health, Safety and Security: the Company employs a strict product quality control system to ensure safety of the product for final consumers. The Company has adequate Emergency Response Plans in place.
     
  • PR6: Biodiversity Conservation and Sustainable Management of Living Natural Resources: the Company does not use any Genetically Modified seeds or grain, which is confirmed by certificates provided by suppliers. The Company also adheres to procedures for discharges of ballast and brine water from the cargo ships it operates, which are in compliance with relevant marine conventions.
     
  • PR10: Information Disclosure and Stakeholder Engagement: the Company conducts public consultations whenever there is a change or expansion of production lines. Information on Company’s activities, developments and community programmes is regularly published on the Company’s website and in the corporate paper which is distributed to public free of charge.

4. Although the Company already has procedures in place to control safety of their produce, an introduction of a formal Hazard Analysis Critical Control Points system will allow streamlining the entire process from agricultural farms through to production and packing facilities.


5. An Environmental and Social Action Plan is currently being developed by the ESD and will be agreed with the Client prior to the Final Review of the Project.

Technical Cooperation

None.

Company Contact

Nelly Subbotina, CEO
Tel.: +7 (8632) 950097
E-mail: subbotina@yugrusiagro.ru

Business opportunities

For business opportunities or procurement, contact the client company.

For state-sector projects, visit EBRD Procurement: Tel: +44 20 7338 6794
Email: procurement@ebrd.com

General enquiries

EBRD project enquiries not related to procurement:
Tel: +44 20 7338 7168
Email: projectenquiries@ebrd.com

Public Information Policy (PIP)

The PIP sets out how the EBRD discloses information and consults with its stakeholders so as to promote better awareness and understanding of its strategies, policies and operations. Please visit the Public Information Policy page below to find out how to request a Public Sector Board Report.
Text of the PIP

Project Complaint Mechanism (PCM)

The Project Complaint Mechanism (PCM) is the EBRD's accountability mechanism. It provides an opportunity for an independent review of complaints from individuals and organisations concerning EBRD-financed projects which are alleged to have caused, or are likely to cause, environmental and/or social harm.

Please visit the Project Complaint Mechanism page to find information about how to submit a complaint. The PCM Officer (pcm@ebrd.com) is available to answer any questions you may have regarding the submission of a complaint and criteria for registration and eligibility, in accordance with the PCM Rules of Procedure.