Moscow, June 19, 2003—
The International Finance Corporation, the private sector financing arm of the World Bank Group, signed an agreement today to provide an eight-year $15 million loan to Stavropolsky Broiler, a poultry subsidiary of Agros, an agribusiness venture established by the Interros group.
IFC’s financing is part of a $35 million project to rehabilitate and expand commercial broiler production in the Stavropol region, the “bread basket” of Russia. Agros recently acquired assets that form an integrated poultry production chain. The project will rehabilitate these newly acquired assets, improve bird breeding, strengthen management practices, increase production, provide working capital, and expand the company’s distribution network. During the past 12 months, IFC has also provided advice and technical expertise to Agros on strategic development, corporate governance and other operational issues. The technical assistance program was funded by IFC’s UK/DFID Trust Fund for the project’s feasibility study to streamline its poultry operations and enhance efficiencies along the integration chain and by IFC’s Netherlands/Senter Trust Fund to help Agros implement a new MIS and set up a well functioning finance and accounting department.
IFC’s loan to Agros reflects IFC’s strategy of increasing its support to Russian-owned businesses and testifies to IFC’s increasing confidence in the restructuring and growth of the Russian economy. “Our goal is to build long-term partnerships with strong and reliable Russian producers to facilitate private sector growth across Russia. We intend to build these long-term partnerships through investments in private business groups that have demonstrated commitment to improving transparency and corporate governance,” commented Mr. Jean-Paul Pinard, Director of IFC’s Agribusiness Department.
"We are happy to see that our effort is supported by international financial institutions. IFC's decision reflects a growing confidence in Russian agriculture. We hope that the present agreement between Agros and IFC marks a new stage in the modernization of the Russian agriculture business. We are also especially grateful for continuous support of our Stavropol project by the Russian Ministry of Agriculture and Governor of the Stavropol region”, says Mr. Dmitry Ushakov, the Agros President.
The International Finance Corporation is a member of the World Bank Group. IFC’s mission is to promote sustainable private sector investment in transition economies, helping to reduce poverty and improve people's lives. IFC finances private sector investments in the emerging markets, mobilizes capital in the international financial markets,
helps clients improve social and environmental sustainability, and provides technical assistance and advice to governments and businesses. Since its founding in 1956 through FY02, IFC has committed more than $34 billion of its own funds and arranged $21 billion in syndications for 2,825 companies in 140 developing countries. IFC's worldwide committed portfolio as of FY02 was $15.1 billion for its own account and $6.5 billion held for participants in loan syndications. Russia joined IFC in 1993. Since then IFC has invested over $1.3 billion to finance nearly 70 projects across a variety of sectors. IFC significantly increased its investment program in Russia in the last two years, investing $217 million in FY02 (July 1, 2001 – June 30, 2002) and over $500 million this fiscal year. IFC’s increased activity reflects the improving investment climate in Russia, greater opportunities in an increasingly broad range of sectors, and stronger foreign investor interest.
Agros is Russia's largest private equity investment fund in agriculture and foods industries. The company, owned by Interros holding and Agros management, was established in October 2001 with $100 million in authorized capital. Its managing company RosKhleboProdukt is responsible for the management of the production and business units developed with the investments provided by the Agros. Agros is mainly focused on grain trading and meat and poultry products. The company is Russia's leading grain trader on both domestic and foreign markets and is the second largest in terms of grain storage capacity. Agros is the country's second largest poultry producer and the third flour producer.
