1

International Finance CorporationPrivate Enterprise Partnership

Survey of the Fish Industry in Russia

PresentationReykjavík, Iceland28 October 2005

2

IFC Products and ServicesIFC Products and Services

LoansLoans Equity & Quasi-EquityEquity & Quasi-Equity Syndicated loansSyndicated loans GuaranteesGuarantees Underwritings, Private Placements, and Equity FundsUnderwritings, Private Placements, and Equity Funds Advisory Services and Technical AssistanceAdvisory Services and Technical Assistance

Products and Services include:Products and Services include:

The International Finance Corporation (IFC) is the The International Finance Corporation (IFC) is the private sector arm of the World Bank Groupprivate sector arm of the World Bank Group

3

IFC Technical Assistance (TA) seeks to:IFC Technical Assistance (TA) seeks to: Promote Private Sector Investment Promote Private Sector Investment Support the Growth of Small & Medium Enterprises Support the Growth of Small & Medium Enterprises

(SMEs) (particularly through building viable financial (SMEs) (particularly through building viable financial institutions)institutions)

Use IFC experience at the enterprise level to help Use IFC experience at the enterprise level to help improve the Business Enabling Environmentimprove the Business Enabling Environment

IFC Technical AssistanceIFC Technical Assistance

4

IFC Technical Assistance in former Soviet IFC Technical Assistance in former Soviet UnionUnion

Approximately 300 staff 100% in the field 90% local

25 offices (9 capital city, 16 regional) 30 programs in 11 countries 22 projects in pipeline

5

IFC’s Private Enterprise PartnershipIFC’s Private Enterprise Partnership

Financial Mkts Agri & Forestry Corp Gov’nance BEE / Linkages

Azerbaijan Leasing

Russia Leasing

Ukraine Leasing

Mongolia Leasing

Central Asia Microfinance

Tajikistan Microfinance

RussiaMortgage

Central Asia Leasing

NW Russia Forestry

Russia Agri-leasing

Ukraine Agribusiness

Ukraine

Azerbaijan

Georgia

Ukraine Banking

Russia Banking

Russia

UzbekistanSME Policy

TajikistanSME Policy

Belarus Business Associations

Russia ICT Connector

MagadanMining Linkages

Russia Automotive Supply Chain

UkraineSME Policy

Dmitrov Dairy & Potato

Southern UkraineVegetable S/C

Vinnytsya Fruit Supply Chain

Vinnytsya DairySupply Chain

RussiaEnergy Efficiency

Ukraine Pulp & PaperDev Program

Russia Fish Survey

Uzbekistan DairySupply Chain

KazakhstanMortgage

Kazakhstan

6

Three Platforms for Agribusiness Three Platforms for Agribusiness Advisory WorkAdvisory Work

1.1. Policy ReformPolicy Reform Facilitate improvements in the business enabling Facilitate improvements in the business enabling

environment. environment.

2.2. Business DevelopmentBusiness Development Facilitate linkages between investors, local Facilitate linkages between investors, local

authorities and other stakeholders. authorities and other stakeholders.

3. 3. Supply Chain DevelopmentSupply Chain Development Improve the structure and efficiency of supply chains Improve the structure and efficiency of supply chains

7

Agribusiness & Forestry Advisory Work in Agribusiness & Forestry Advisory Work in RussiaRussia

8

ExampleExample: NorthWest Russia Forestry : NorthWest Russia Forestry ProjectProjectPromotes direct investments in wood harvesting and processingPromotes direct investments in wood harvesting and processing

Results: Facilitation of Finnish investments:

$189.3 million in completed investments $24.3 million in progress $348.9 million in committed investments

ActivitiesActivities: : Screen forest areas and Screen forest areas and

Russian partnersRussian partners Evaluate investment proposalsEvaluate investment proposals Implement sustainable forest Implement sustainable forest

management practicesmanagement practices Botnia Sawmill, Podporozhie, RussiaCommissioning due Jan 2006

9

IFC Investments in RussiaIFC Investments in Russia

IFC Portfolio by CountryFY2004

Other80%

Brazil7% Russia

7%

India6%

Agribusiness3%

Oil, Gas and Mining

8%

Telecom & IT2%

Infrastructure12%

Health & Education

1%

Financial Markets

46%

General Manufacturing

25%

Private Equity Funds

3%

IFC Portfolio in Russia by Sector June 30, 2005

Total IFC account in Russia: US$ 1.695 billion

10

Campina Yogurt Russia

IFC Food and Agri-Investments in RussiaIFC Food and Agri-Investments in Russia

Inputs FarmProductio

n

AgriMarketin

gProcessing

Food Marketing

Distribution

IFC primarily invests in Food Processing and IFC primarily invests in Food Processing and Upstream & Downstream LinkagesUpstream & Downstream Linkages

IFC Food & Agribusiness Portfolio:IFC Food & Agribusiness Portfolio: $1.2 Billion Worldwide$1.2 Billion Worldwide $56 Million in Russia$56 Million in Russia

Upstream

Downstream

11

IFC Food and Agri-Business Investments IFC Food and Agri-Business Investments inin Russia and Ukraine Russia and Ukraine

Bravo International

Loan $15 millionSyndicated loan $7 million

Expansion of beer production,transfer of efficient technologies,

quality control, and transportand distribution systems.

Signed: August 2001

Russia

Campina

Loan $10 million

Construction of a yogurt factory.Technical assistance on

local supply chain development.

Russia

Signed: September 1999

Agro industrialFinance Company

Equity $0.5 millionLoan $5 million

Syndicated loan $10 million

Creation of a new financialintermediary to finance agricultural

enterprises with supply links to majorfood and agribusinesscompanies in Russia

Signed: September 2002

Russia

StavropolskyBroiler(Agros)

Loan $15 million

Rehabilitation and expansion ofcommercial poultry production

in the Stavropol region.Advice on strategic development and

corporate governance.

Signed: June 2003

Russia

LebedyanskyExperimental

Cannery

Loan $35 million

Expansion and modernization ofthe existing juice production facilities,

reduction of production costsand diversification of business

Signed: June 2004

Russia

MironovskyKhleboprodukt I & II

Equity $20 million Loan $60 million

Supporting the company’s expansion strategy.

Signed: May 2005

Ukraine

Sandora

Loan $10 million

Expansion and modernization ofthe existing juice production lines,

expansion of distribution,provision of working capital

Signed: June 2004

Ukraine

12

Survey of Fish Industry in RussiaSurvey of Fish Industry in Russia

Purpose:Purpose: Provide an Provide an updated and accurate updated and accurate source of industry source of industry information to facilitate information to facilitate investment and business investment and business decisionsdecisions

IFC’s Role:IFC’s Role: Facilitate development Facilitate development

of Terms of Referenceof Terms of Reference Supervise the selection, Supervise the selection,

appointment, and work appointment, and work of the Consultantsof the Consultants

Direct Funding: $97,000Direct Funding: $97,000

Agreement signed by Ambassador Benedikt Jonsson and IFC Director Edward Nassim in

Moscow, 15 Nov. 2004

13

Survey of Fish Industry in RussiaSurvey of Fish Industry in Russia

BID NO. NAME Country1 St Pete SME Dev Russia

2 Poseidon/Tripleline UK

3 Meka Iceland

4 Sergei Mashkarenko Russia

5 Eurofish Denmark

6 MacAlister Elliott & Partners UK

7 Marecon Holland

8 Risk Management Iceland

Fish Industry Expertise Russia Expertise Market Expertise Links to Iceland Overall Presentation &

Methodology

Selection criteria: Eight Bids received:

Consultant Selection

Contract awarded to EUROFISH

14

Survey of Fish Industry in RussiaSurvey of Fish Industry in Russia

MarketMarket Fish Industry StatisticsFish Industry Statistics Investment Activity and ProspectsInvestment Activity and Prospects Fishing Fleet and Fish HarvestingFishing Fleet and Fish Harvesting Fish ProcessingFish Processing Fish FarmingFish Farming

The TOR focuses on these issues:

The Terms of Reference addresses major fishing regions, consumer markets, and fish processing, distribution and storage facilities in the Russian Federation.

These issues were excluded from the TOR and addressed internally:

Policy, Legal and Regulatory Environment Fisheries Management Fishing Fleet and Fish Harvesting (Future Developments only)

15

Thank YouThank You

Ian LuytSenior Operations ManagerAgribusiness & Forest Products – Technical Assistance ProgramsInternational Finance CorporationMoscow, Russiailuyt@ifc.org

28 October 2005Reykjavik