* Investment will create up to 40 new jobs in high unemployment area
Sarajevo, April 11, 2002
—Southeast Europe Enterprise Development (SEED), a multi-donor facility managed by the International Finance Corporation, has brokered a €2 million investment by the Vienna-based Horizonte Venture Management into Fratello, a leading Bosnia and Herzegovina (BiH) fish and seafood products distribution company. Horizonte will pay €765,000 to obtain a 30 percent equity stake in the company and will jointly raise €1.3 million with Fratello to finance the construction and establishment of a fish processing and packaging facility in Banja Luka.
The investment signals a major boost in investor confidence toward the Bosnian entity of Republika Srpska. Horizonte’s investment is one of the largest foreign investments in this BiH entity to date and is likely to lead to the creation of up to 40 new jobs in a region that has one of the highest unemployment concentrations in Europe.
SEED General Manager Mariann Kurtz praised both parties in their efforts to achieve this result: “We are here today because both parties were willing to take a risk for the benefit of their businesses.” The Horizonte managing partner Dr. Alfred Matzka was equally upbeat: “Fratello’s company mission is what first caught my eye, finding the right partner in this environment is absolutely crucial.”
Fratello, a privately owned company established in 1996, is based in Banja Luka and specializes in the importing and sales of frozen seafood products. The target markets are: BiH, the Federal Republic of Yugoslavia, Macedonia, Croatia and Slovenia. Fratello is currently one of two market leaders in BiH, achieving strong growth in sales during the last 2 years. Sales in 2001 alone increased by 35 percent, and resulted in 12 percent market share.
In December 2000 under the guidance of SEED, Fratello established a separate stand-alone company with the objective of seeking a strategic partner(s) to further develop the business into a major fish processing company. SEED’s analysis for this business expansion was adopted as one of the annexes to the investment contract and will be used with banks to help secure the needed debt financing.
The Horizonte Fund headquartered in Vienna is one of five managed by the Venture Management Group. It is the largest fund manager currently operating in Southeast Europe and includes International Finance Corporation (IFC) as one of its investors.
The fish processing and packaging plant is due for completion in December 2002.
SEED is a multi-donor facility managed by IFC. SEED’s mission is to support small and medium enterprise (SME) development and improve the overall environment for SME growth and competitiveness in Albania, Bosnia and Herzegovina, Macedonia, and the Federal Republic of Yugoslavia.
IFC’s mission is to promote sustainable private sector investment in developing countries, helping to reduce poverty and improve people's lives. IFC finances private sector investments in the developing world, mobilizes capital in the international financial markets, and provides technical assistance and advice to governments and businesses. Since its founding in 1956, IFC has committed more than $31 billion of its own funds and arranged $20 billion in syndications for 2,636 companies in 140 developing countries. IFC's committed portfolio at the end of FY01 was $14.3 billion.
