Minsk/Moscow/Washington DC, November 8, 2006
—The International Finance Corporation, the private sector arm of the World Bank Group, provided a $35.5 million loan to Detroit Investments and $4.5 million in equity to the Detroit Investments’ Belorussian subsidiaries. With IFC’s financing, Detroit Investments will establish the first private large-scale juice plant and the first nationwide discount-store chain in Belarus.
Detroit Investments will acquire an idle cannery in Bobruisk (Mogilev region, Eastern Belarus) through privatization, one of the few in Belarus. Detroit Investments will modernize the factory to make it a state-of-the-art juice plant. The company sees significant potential in developing local juice production in the Belorussian market, which is currently dominated by imports. Detroit Investments intends to supply the domestic market first and export its juice products at a later stage. To operate the new juice plant the company will rehire former employees who were laid off from the cannery when it closed a year ago. Detroit Investments already operates a brewery in Bobruisk, which IFC has also financed. With the opening of the new juice plant Detroit Investments will become a major employer in a small town of Bobruisk.
In addition, Detroit Investments in partnership with a leading regional retailer will establish a chain of discount stores in 15 cities throughout Belarus, offering consumers a wide range of high-quality and reasonably priced products. The operation of the new retail chain will create business opportunities and generate employment along the supply and distribution chains.
According to Detroit Investments’ Chairman Eugene Kashper, “Detroit Investments is committed to investment in Belarus, a country with much untapped economic potential. Our partnership with IFC will allow us to realize these important projects, which we hope will improve the standard of living for all Belarusians.”
Jean-Paul Pinard, IFC’s Director of the Agribusiness Department, noted, “The implementation of this project by Detroit Investments, in partnership with IFC, will result in substantial employment both at the company level and along the supply chain and will create widespread economic opportunities for businesses in the beverage, distribution, logistics, retail and food production industries in Belarus.”
“IFC expects this project to have significant demonstration impacts and catalyze foreign direct investment which has thus far been negligible in Belarus,” said Mr. Edward Nassim, IFC’s Regional Vice President. “The project is an important opportunity for IFC to participate in the development of the private sector in Belarus.”
Nicholas Henderson-Stewart, Detroit Investments’ Chief Executive Officer, added, “This transaction marks a significant milestone in our partnership with IFC. We see in IFC a long-term investor and a partner who will enable us to implement our growth strategy and expand into new regions and sectors.”
About the Detroit Group
Detroit Investments is the main investment vehicle of the Detroit Group, which is primarily involved in the production, import and distribution of beverages in Russia, Belarus, and Kazakhstan. Detroit Investments started working with IFC in 2004 and implemented two joint projects. IFC financed the Detroit Belarus Brewing Company in Belarus and Vladpivo in Russia.
The Detroit Group was founded in 1994 by Eugene Kashper and Alexander Lifshits. The Group was initially focused on beverage importation and distribution in Russia through North Winds Brewing. In 1998 the Group entered beer production with the creation of Ivan Taranov Breweries (PIT), which was sold to Heineken in 2005.
The Group is now involved in the production of beer through Detroit Belarus Brewing Company and Vladpivo. The Group continues to import and distribute beverages in Russia and Kazakhstan through its wholly owned subsidiaries, North Winds Beverages and Aleph Trade. The Group also owns a real estate development company and has interests in real-estate in Russia and the United States.
About IFC
The International Finance Corporation
,
the private sector arm of the World Bank Group, is the largest multilateral provider of financing for private enterprise in developing countries. IFC finances private sector investments, mobilizes capital in international financial markets, facilitates trade, helps clients improve social and environmental sustainability, and provides technical assistance and advice to businesses and governments. From its founding in 1956 through FY06, IFC has committed more than $56 billion of its own funds for private sector investments in the developing world and mobilized an additional $25 billion in syndications for 3,531 companies in 140 developing countries. With the support of funding from donors, it has also provided more than $1 billion in technical assistance and advisory services. For more information, visit
www.ifc.org
.
Belarus became a member and a shareholder of IFC in 1992. Since then through the end of October 2006, IFC has committed $71.5 million in loans. In addition, IFC has been actively involved in technical assistance in Belarus since 1993. The work began with advisory services on privatization of small businesses. Currently, IFC focuses its efforts on small and medium enterprise development and the improvement of the investment climate.
