The EBRD is providing a €10mn loan to a primary agricultural producer Agroinvest, part of MK Group – leading producer and exporter of crop farming cultures in Serbia and one of the main agribusiness operators in Europe.
The funds will be used to develop a modern grain storage elevator with a capacity exceeding 100,000 tonnes, which will enable Agroinvest to store, dry and handle its own and third party grains in an efficient manner and provide the standardised quality of grain required by the market.
The project is part of the bank’s larger initiative of supporting primary agriculture in Ukraine, which is one of the country’s key economic sectors. Ukraine initiated the warehouse receipts programme back in 2004, an initiative strongly supported by the bank. It is helping to increase the availability of post-harvest financing to farmers and food processors in the country.
According to Kamen Zahariev, EBRD director for Ukraine, there is a lack of good sizeable storage facilities for agricultural commodities in Ukraine. As a result of the project implementation, the grain storage costs may be reduced and competitiveness will be improved. This in turn will improve the price, quality and service to farmers, traders, processing, refining and biofuels production companies.
The project will have a strong demonstration effect of foreign investment on primary agriculture in Ukraine, he says.
MK Group wishes to implement its know-how, developed successfully in Serbia, on new land in the aim of reaching its business objective – an international leading position in high-technology agribusiness production, says Miodrag Kostic, president of the board of directors of MK Group.
According to him, the fact that the EBRD finances the project is another confirmation of the significance of the project and the reputation of MK Group in international financial circles.