Sandora: Supply Chain Development in Ukraine
IFC’s partnership with Sandora, a rising Ukrainian agribusiness company, shows how much a combination of investment and technical assistance can do to build a local firm’s competitiveness and development impact. In addition to lending Sandora $40 million in recent years, IFC has made it a key partner in a Swedish-funded project to strengthen farms in southern Ukraine and help them become suppliers to Sandora and other large food processors in the region.
- Founded by a local entrepreneur in 1995, Sandora LLC is Ukraine’s leading producer of branded packaged juices and nectars; its annual turnover has more than doubled since 2003 to today’s $160 million, with a focus on the domestic market but about 25 percent of its production exported to other former Soviet republics.
- Located in southern Ukraine, it produces a wide range of natural juices and nectars from locally grown fruits and vegetables.
- IFC has worked with Sandora since 2004, supporting its growth with financing, advice, and technical assistance; the successful partnership is continuing.
Partnership with IFC
- IFC has provided $40 million in long-term loans to Sandora; this funding, unavailable from local financial institutions, helped the company modernize and expand operations.
- IFC also provided advice on corporate governance, business strategy, management organization, and ways to adopt International Financial Reporting Standards and leading food safety management systems.
- IFC and Sweden are partnering to help the company strengthen its local supply chain through technical assistance that builds farmers’ access to financing from local banks and advises key players in the supply chain (farms, input suppliers, banks, local governments) on legal, business, marketing, and technological improvements. IFC’s German Trust Fund also financed support to the company for the implementation of Hazard Analysis and Critical Control Point (HAACP) food safety management systems.
- Because of the company’s progress in implementing its food safety program, McDonald’s now sells Sandora juices in its Ukrainian outlets.
- IFC’s investment and technical assistance is helping build the farming sector in southern Ukraine, a region with few other employment opportunities: the emergence of its farm enterprises as efficient, modern businesses able to supply high-quality produce to Sandora is increasing rural incomes and employment.
- In 2006, Sandora signed supply contracts worth $5.6 million with 25 local farms assisted by IFC that together employ more than 1,500 people. The technical assistance is helping bring these local farms to international standards of competitiveness.
- IFC has helped transfer technology through the import of modern processing equipment and has trained Sandora’s management and employees in food safety and quality control.
- Other companies in the region are following Sandora’s lead in implementing international financial reporting and food safety management systems.
Rural Impact: Sandora buys vegetables from more than 1,500 Ukrainian farmers.