BSTDB Supports Food Industry in Georgia
Press Release | 02-Apr-2001
BSTDB will provide up to USD 1 million to finance the working capital requirements of Progress Ltd., one of the largest producers of flour in Georgia. The loan would be intermediated by the Bank of Georgia, which is currently the main banking partner of Progress Ltd. The maturity of the loan is one year, extendable to two years. The project is the first operation of BSTDB in the manufacturing sector of Georgia.
The project will allow increasing the local production of quality flour, which is sold to bread production plants and bakeries, as well as bran and manna-crop. As the company imports grain from Russia, Ukraine, Bulgaria, and exports its products to Armenia and Azerbaijan, the loan would also stimulate trade among the Bank's member countries.
The project reflects the BSTDB strategy to support small and medium businesses, which lack working capital and are hampered by unavailability of funds on acceptable terms. The support of SME sector is one of the Bank's priority activities. The Bank is a major shareholder in the Trans-Balkan SME Equity Fund managed by SEAF. In 2000 BSTDB supported Turkish SME affected by severe earthquakes, and financed an SME project in the food industry of Bulgaria. The BSTDB Board of Directors has approved a USD12 million credit line for SME in the southern regions of Russia.
Progress Ltd., a private company owned by Georgian and Russian shareholders, is one of the strongest flourmills in Georgia, accounting for over 10% of the total flour market in the country. Currently the company cooperates with about 70 wholesale traders, large bread factories, small bakeries and retail trade outlets.
The Bank of Georgia is the largest commercial bank in the country, with 54 branches and offices. EBRD and DEG (Germany) are the biggest shareholders of the Bank. The Bank of Georgia works with credit lines extended by IFC, EBRD, DEG, Commerzbank, Deutche Bank, other major western banks. The Bank was selected by BSTDB as financial intermediary for its trade finance operations in Georgia, with the first operation for USD 1.5 million signed in June 2000 to improve Georgian exports in particular to the Black Sea countries.