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| Sandora II |
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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 | 25232 |
| Company name | Sandora Limited Liability Company |
| Country | Ukraine |
| Sector | Food & Beverages |
| Environmental category | B |
| Department | Agribusiness |
| Status | Completed |
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| Date SPI disclosed | July 18, 2006 |
| Projected board date | September 1, 2006 |
| Previous Events | Invested: October 23, 2006
Signed: September 28, 2006
Approved: September 25, 2006 |
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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 |
Sandora LLC (Sandora or the company) is a leading manufacturer of branded packaged juices and juice nectars in Ukraine. It owns and operates two fruit processing and two juice and nectars packaging plants located in Southern Ukraine. The proposed project is a program of corporate-wide investments at Sandora aimed at:
- increasing the company’s productive capacity;
- introducing new plastic and glass packaging;
- launching baby food products;
- strengthening fruit processing and concentrate production;
- improving Sandora’s distribution network; and
- increasing working capital. |
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| Project sponsor and major shareholders of project company |
| Sandora is owned by Igor Bezzub, Raimondas Tumenas and Sergey Sypko. 1995, Mr. Sypko, at that time professor at the Mykolayiv ship building university, came up with the idea of establishing a greenfield fruit processing/juice packing business in Mykolayiv, Southern Ukraine, an area with abundant supply of quality fresh fruit and vegetables. After searching for investors, he partnered with two Lithuanian citizens, Igor Bezzub and Raimondas Tumenas, who provided start-up capital for the venture and developed marketing and sales. Today, Merrs. Bezzub and Tumenas own each 45% of Sandora and Mr. Sypko, who serves as the company’s General Director, owns 10%. |
| Total project cost and amount and nature of IFC's investment |
| The proposed corporate investment program for the next two years is estimated at $99 million, inclusive of contingencies and working capital. The proposed IFC investment is a $20 million A loan for IFC’s own account. |
| Location of project and description of site |
| Juice and nectar production is located outside of Mykolayiv in two modern state-of-the-art facilities. Electrical power is supplied from the national grid and water is drawn from ground wells. The plants’ drainage is discharged into municipal system. Fruit wastes are sold for industrial use and animal feed. Both plants have access to transportation infrastructure and are located in the areas with high quality work force. Sandora also operates two small fruit processing facilities located in Simferopol and Kherson regions. |
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| Anticipated development impact of the project |
| The proposed investment program will add new capacity in the company’s core juice and nectar packaging and fruit puree processing business. Modernization, rationalization and capacity expansion of Sandora’s production facilities, certification to international standards (HACCP) and strengthening of its local raw material base will allow the company to cater to the growing demand for nectars and juices in Ukraine and abroad, while improving product quality and broadening product range. The company is and will remain a key contributor to the government’s fiscal revenues in the Mykolayiv region. The proposed investment will also help the development of the fruit sector in southern Ukraine by creating consistent demand for local fruits purchased from private small farmers. |
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| IFC's expected development contribution |
The project promotes the production of value-added products and supports local entrepreneurship as well as technology transfer by importing the latest fruit processing and packaging equipment. The key role of IFC will be in providing:
- long-term financing necessary for carrying out the company’s expansion and diversification plans; and
- assistance in developing long-term strategy for the company’s growth.
IFC will also play a role in assisting the company with:
- the introduction of HACCP; and
- improving supply management related to local fruit procurement. |
| Environmental and social issues - Category B |
| This is a category B project according to IFC’s Procedure for Environmental and Social Review of Projects because a limited number of specific environmental and social impacts may result that can be avoided or mitigated by adhering to generally recognized performance standards, guidelines or design criteria. The company has presented plans to address these impacts to ensure that the proposed investments will upon implementation of the specific agreed measures, comply with the environmental and social requirements - the host country laws and regulations and the World Bank/IFC environment and social policies and the environmental, health and safety guidelines. IFC’s practice is to categorize corporate investments of this type as Category B, particularly in cases such as this where an existing investment has assessed the physical facilities and the company is up-to-date in meeting its commitments under that investment. |
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| For inquiries about the project, contact: |
Sergey Sypko, General Director
E-mail: sypko@sandora.mk.ua
Telephone: +380-512-581-041
Environmental documents accessible to locally affected communities are located at Sandora’s office located at:
17 N. Zavodskaya Str., Mykolayiv
54028, Ukraine |
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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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