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| BGK |
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| Summary of Proposed Investment |
| This Summary of Proposed Investment is prepared and distributed to the public in advance of the IFC Board of Directors’ consideration of the proposed transaction. Its purpose is to enhance the transparency of IFC’s activities, and this document should not be construed as presuming the outcome of the Board decision. Board dates are estimates only. |
| Project number | 26427 |
| Company name | Belgorodskie Granulirovannye Korma |
| Country | Russian Federation |
| Sector | Agriculture and Forestry |
| Environmental category | B |
| Department | Agribusiness |
| Status | Active |
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| Date SPI disclosed | November 12, 2007 |
| Projected board date | December 13, 2007 |
| Previous Events | Invested: June 4, 2008
Signed: May 29, 2008
Approved: February 7, 2008 |
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| View Environmental & Social Review Summary (ESRS), click here |
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| Overview |
Sponsor/Cost/Location |
Development Impact |
Contacts |
Attachments |
| Project description |
Belgrankorm Holding Ltd. (BGK or the company), one of the leading agro-industrial meat producers in Russia, has requested IFC’s assistance in financing its corporate-wide expansion aimed at satisfying rapidly growing domestic demand via doubling production of meat, grain and milk by 2010.
The project involves:
- expansion of poultry breeder, broiler farms and hatcheries;
- start up of a new poultry production complex in Northern Russia;
- expansion of growing pig farms;
- construction of a pork slaughter house and processing plant;
- expansion of dairy farms;
- expansion of crop land for grain growing;
- acquisition of agricultural machinery and equipment;
- expansion of feed mill capacity, and
- working capital increase and refinancing of the existing debt. |
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| Project sponsor and major shareholders of project company |
| The project is sponsored by Alexander Orlov, a Russian national, who is the majority owner of BGK. |
| Total project cost and amount and nature of IFC's investment |
| Total project cost is estimated at $246 Million. The IFC proposed investment is up to $80 million, consisting of an A Loan of up to $30 million and equity of up to $50 million. |
| Location of project and description of site |
| Currently BGK’s production facilities are located in five areas of Belgorod region in Central Russia. These are Belgorodsky, Shebekinsky, Yakovlevsky, Borisovsky and Rakityansky districts. The project will include modernization of facilities on existing sites as well as construction of new production units in Belgorod region. In addition, the company will also undertake a greenfield poultry project in Veliky Novgorod region, which will include construction of broiler farms, slaughter house and a processing plant. |
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| Anticipated development impact of the project |
| The project will strengthen and expand the capacity of a modern competitive poultry producer and will improve its efficiencies. The company operates in a rural part of Central Russia, a region with lower income population; its growth will benefit local communities through direct and indirect job creation, training, and education opportunities. The project will contribute to the substitution of poultry meat imports, and to the expansion of chilled poultry segment in Russia. |
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| IFC's expected development contribution |
IFC’s key contributions as a long-term partner to the company’s growth are expected to be as follows:
- provide industry and sector expertise, including biosecurity and global benchmarks;
- advise the company on corporate governance best practices;
- introduce IFRS financial reporting and auditing. |
| Environmental and social issues - Category B |
| This is a Category B project according to IFC’s Environmental and Social Review Procedures. A summary of IFC’s environmental and social review findings for the project including the rationale for the B categorization will shortly be publicly available in the Environmental and Social Review Summary (ESRS) disclosed on IFC’s website (http://www.ifc.org/projects). The Environmental and Social Action Plan (ESAP), which is attached to the ESRS, contains specific tasks that the client will undertake to mitigate perceived risks and impacts from the project, and to ensure compliance with IFC’s Performance Standards. |
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| For inquiries about the project, contact: |
For more information, contact Elena Kochura, Chief Accountant at the company’s office at:
BEZRK-Belgrankorm Agroholding
1 Borisovskoye Shosse
Proletarsky
Rakitianksy area
Belgrorodsky region
309300 Russia
The hard copies of the ESRS and ESAP will be made available at the following location:
- Belgorod City Library, 14 ul. Nikolaia Ostovskogo, Belgorod 308000, Russia
- Rakityanskaya Library, 20 ul. Proletarskaya, Rakitnoye 309310, Belgorod region, Russia
- Borisovskaya Library, 2a ul. Pervomaiskaya, Borisovka 309340, Belgorod region, Russia
- Yakovlevskaya Library, 1a, ul. Yubileinaya, Stroitel 309070, Belgorod region, Russia
- Shebekinskaya Library, 12 Rzhevskoye Shosse, Shebekino, Belgorod region, Russia
“Nasha Zhizn”, regional newspaper, Rakitianksy area, Belgrorod region
“Nasha Letopis”, corporate publication, BEZRK-Belgrankorm agroholding.
The electronic versions of the ESRS and the ESAP will be available for public review on IFC’s website and the company’s website www.jasnzori.ru |
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| For inquiries and comments about IFC, contact: |
General IFC Inquiries
IFC Corporate Relations
2121 Pennsylvania Avenue, NW
Washington DC 20433
Telephone: 202-473-3800
Fax: 202-974-4384
E Mail: Webmaster |
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