The European Bank for Reconstruction and Development (EBRD) has provided a €15 million loan to Kazakhstan dairy producer FoodMaster, a subsidiary of dairy giant Lactalis.
The debt financing will fund the company’s capex program until 2018, facilitating upgrades at three of the company’s three dairy processing plants, as well as improvements at dairy farms and new product launches.
The upgrades will support expansion of Kazakhstan’s cold chain and help to institute best practices for food quality and safety, as well as environment and sustainability standards in the Central Asian country’s dairy sector.
Kazakhstan’s dairy sector is challenged by low productivity and quality problems. According to a 2015 report by the Food and Agriculture Organisation, only 30 percent of Kazakhstan’s milk supply is processed in factories, with home processing and sales between individuals and smallholder producers making up much of the market and powdered milk commonly serving as a substitute.
In 2014, the EBRD signed an agreement with the Kazakhstan government to help invest the country’s oil revenues in the development of other sectors. The following year, the EBRD announced that food and agribusiness would be target of the organisation’s development efforts.
“Exactly a year ago in Astana, I announced that the EBRD would increase funding of the strategic agribusiness sector in Kazakhstan at the Foreign Investors Council which had agriculture as its theme,” said EBRD president Suma Chakrabarti in a statement. “I am very pleased that today we are announcing our first project in the dairy sector in Kazakhstan.”
To date, the EBRD has invested over €6.3 billion in Kazakhstan through more than 200 projects in infrastructure, energy, agribusiness, industry and finance.
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