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May 31, 2005
— The International Finance Corporation (IFC), the private sector financing arm of the World Bank Group, provided $20 million in equity and a $60 million loan to Mironovsky Khliboproduct, Ukraine’s leading producer of fresh poultry under the brand of Nasha Ryaba. IFC’s financing will support the company’s strategy of doubling its production capacity by 2008 and expanding into a new market of partially processed and cooked poultry products.
This is IFC’s largest investment in Ukraine to date and a second project with Mironovsky. IFC’s first loan of $30 million in 2003 enabled Mironovsky to expand, modernize, and improve the efficiency of its production as well as strengthen its distribution network by creating 900 franchise retail outlets. The company built a plant for production of sunflower-based poultry feed, the first of its kind in the world. This new technology has allowed Mironovsky to lower the cost of feed and become one of the world’s lowest-cost producers of poultry. Mironovsky was among the first food companies in Ukraine to develop a chilled distribution system to deliver fresh products to retail outlets, which allowed the company to compete with imports of frozen poultry. Low-cost and high-quality products vaulted Mironovsky into a leading position in Ukraine’s market for fresh poultry, with a 20 percent share.
The demand for Mironovsky’s well-recognized brand, Nasha Ryaba, is growing fast. To keep up with this demand the company is now working to double its production within three years and develop new partially processed and cooked products. The total project cost is estimated at $260 million, of which IFC is providing $80 million.
Jean-Paul Pinard, IFC’s director for agribusiness, said: “IFC' investment in Mironovsky marks an important step in our strategy to step up our activities in Ukraine’s growing agribusiness sector. It will support the company's efforts to maintain its market leadership by expanding its operations in line with market developments while strengthening its management systems in terms of food safety and corporate governance.”
Yuriy Kosyuk, chairman of the board of Mironovsky, said, “IFC has proven to be an understanding, flexible, and reliable partner for us. Not only does it provide financing on competitive terms, but it also has a wealth of technical, industry, corporate governance, and financial structuring expertise, all of which have helped us improve our company. As a result of our joint work over the past two years, Mironovsky has become a better corporate, and we are now able to access financing on more favorable terms.”
The mission of IFC (
) 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, helps clients improve social and environmental sustainability, and provides technical assistance and advice to governments and businesses. From its founding in 1956 through FY04, IFC has committed more than $44 billion of its own funds and arranged $23 billion in syndications for 3,143 companies in 140 developing countries. IFC’s worldwide committed portfolio as of FY04 was $17.9 billion for its own account and $5.5 billion held for participants in loan syndications.
Ukraine became a member of IFC in 1993. To date, IFC has invested $233 million across 16 projects in the country. IFC has significantly expanded its investment program in Ukraine in fiscal 2004, committing $72 million in the agribusiness, financial, and general manufacturing sectors. IFC has also been conducting an extensive advisory program in Ukraine since 1992. Current donor-funded programs offer advice on corporate governance to companies and banks, seek to improve the business environment, and promote leasing, development of the agribusiness sector, and the growth of small and medium enterprises.
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