BNPP and IFTRIC arrange Russian poultry plant deal
BNP Paribas (BNPP) has closed an ambitious seven-year 23.7 million Euro financing for Russia’s Vneshtorgbank, backed by the Israeli export credit agency IFTRIC, for the construction of a poultry factory in Rostov, southern Russia. Building work started in August. The first stage of development will bring the factory’s output to 11,000 tonnes per year – import substitution in a market where American producers presently account for more than 90% of sales in Russia.
Vneshtorgbank has financed the project to the tune of 31 million Euros, including the BNP Paribas loan. The newly-registered company behind the project, Evrodon, is reported by the Russian press to be owned by Rostov drinks trader Vadim Vaneev, joint owner of the local firm Mishel-alko. The plant is being built on a turnkey basis by MAD International, the Israel-based agricultural trade development corporation. Marcelo Weil in BNPP’s European export finance team, based in Paris, informs Trade Finance: “Usually export finance is associated with infrastructure in a bricks-and-mortar sense. Here the emphasis is on transfer of knowledge and expertise from Israel.
We were able to put the financing in place due to our excellent relationships with Vneshtorgbank on one side and MAD International, a long-standing client, on the other.” Vneshtorgbank says that Evrodon’s factory, using the latest technology, will significantly reduce the import of turkey meat to Russia and boost agriculture in the Rostov region. Evrodon’s turkey factory will be Russia’s largest; its projected output equals the five largest domestic producers’ current aggregate total.
Source: Trade Finance Date: Dec 2004/Jan 2005