European Bank for Reconstruction and Development lends US$15M to largest wood processing and furniture group in Belarus to modernize, increase energy efficiency, reduce environmental footprint
September 17, 2009
– The European Bank for Reconstruction and Development is lending $15 million to ZAO Holding Company Pinskdrev, Belarus’s largest wood processing and furniture group. The financing will support modernisation of its production lines, increase energy efficiency and improve environmental impact. This will help the group cut unit production costs and increase competitiveness.
The group is already recycling wood waste created by its manufacturing processes to produce steam and heat in-house. The EBRD loan signed in Minsk today will allow the introduction of metering and monitoring systems to rationalise control over energy use. The EBRD will fund an energy audit to identify other potential efficiency gains. In addition, as part of the corporate governance measures to which the group has committed, Pinskdrev will appoint an independent director to its Supervisory Board.
This is showcase transaction for Belarus which has the potential for demonstrating how much can be achieved when a company decides to modernise its production lines, improve its corporate governance and rationalise the use of energy, said Mark Webber, the EBRD’s Head of General Industries in the region.
The privately-owned Pinskdrev is a vertically integrated group engaged in the whole process chain from wood harvesting and saw milling to furniture production. It is located in Pinsk, a town in the south of the country, and is the largest employer in the region employing 6,000 people. It was privatised in 1992. The group accounts for nearly a quarter of Belarus’s furniture exports, selling mainly to Russia, Germany and Kazakhstan.
The EBRD is working on a new three-year strategy for its operations in the country which is expected to be submitted to the Bank’s Board of Directors before the end of 2009. The EBRD’s net cumulative investments in Belarus total €292 million ($408 million).