The European Bank for Reconstruction and Development (EBRD) has unveiled plans to allocate a secured long-term loan of €10 million (US$11 million) to Ukrainian pet food producer Kormotech to support the company’s international expansion strategy.
The bank “will support the first cross-border investment of a Ukrainian company, consisting in the construction of a new production facility in Lithuania,” the EBRD said in a statement.
“These funds will only be used for the construction of the Lithuanian facility. This plant with a [production] capacity of 20,000 tons of wet pet food per year will [operate based] on ... Danish and German equipment worth €6 million [US$6.62 million],” Kateryna Kovalyuk, the head of PR and communications at Kormotech, told Petfoodindustry.com.
Anton Usov, a spokesperson for EBRD, told Petfoodindustry.com that the project has not been signed yet, but as is the case with “any private sector transaction, the pricing will be linked to the market terms,” and the terms “and conditions for private sector lending are individual.”
One of Ukraine’s top pet food companies
Kormotech is one of Ukraine’s top three pet food producers, according to data from EBRD. The Ukrainian company’s product range includes wet and dry pet food sold under its own brands, as well as private label products. These include the Myau! brand for cats and the Hav! brand for dogs, which are predominantly sold in the former Soviet Union markets.
“Myau! is the most popular [cat food] product in the Ukrainian market in terms of volume. Club 4 Paws is a premium … dry and wet pet food and snacks for cats and dogs which are mostly sold in the Eastern Europe markets,” Kovalyuk said.
Other products sold by the Ukrainian pet food maker include Optimeal wet and dry canine and premium feline products, as well as grain-free products.
Expanding pet food export markets
“By the end of 2023, we plan to double our revenues compared to 2019,” Kovalyuk said. “To do that, we will increase [our] sales particularly [with respect to] export markets.”
Kormotech’s products are currently sold in 25 countries worldwide, with a focus on various European markets. The launch of the facility in Lithuania will facilitate the firm’s export to the Scandinavian markets plus other European countries, but also to Latin America, according to the company representative.
Established in 2003, Kormotech is based in Lviv, in Ukraine’s western part.