EBRD Acquires Stake in Russian Cake Manufacturer
The European Bank for Reconstruction and Development has invested Eur10m to acquire a minority stake in Hlebprom, a leading Russian cake and biscuit producer which has developed its own national distribution system. The funding will mainly be used to upgrade the privately-owned company’s existing plants so as to increase efficiency and productivity.
The acquisition by the EBRD, a significant investor in Russia’s agribusiness sector, will encourage Hlebprom to purchase more raw materials from domestic suppliers, particularly cream and butter, thus stimulating the development of higher-grade products by Russian dairy farmers in order to meet the company’s quality standards.
“This transaction is a good example of how the EBRD can stimulate primary agricultural production in Russia through its investments in processing and other segments of the agribusiness sector,” says Gilles Mettetal, the EBRD’s director of agribusiness.
Hlebprom, founded in 1982 and privatised in 1994, specialises in producing flour-based confectioneries and chilled cakes which are mainly sold through supermarket chains. The company’s main plant is in the city of Chelyabinsk, in Russia’s industrial heartland.
In the agribusiness sector alone the EBRD has directly committed over Eur6.4b (in over 420 projects across Central and Eastern Europe and the Commonwealth of Independent States since 1991).
