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The European Bank for Reconstruction and Development (EBRD) will hold a final review on Sept. 11 on a possible €40 million loan to Ukrainian pet food producer Kormotech Group, which aims to build a second factory in Lithuania.
The company, based in the western Ukrainian city of Lviv, will build the new factory next to its existing one in the industrial town of Kedainial, Lithuania. That factory, largely automated, has been operating since 2020, allowing the producer direct access to the European Union markets.
The new factory "will support Kormotech Group's strategy to expand its export operations and geographical diversification," the EBRD said, adding that it will also "help to strengthen Kormotech's human resources practices in response to the ongoing labour market challenges in Ukraine."
The EBRD loan review statement said the entire factory project will cost €63 million. The company said on its website that the first factory was built with an investment of €15 million.
Kormotech, which was founded in 2003, is now ranked the 49th biggest pet food producer in the world by revenue, according to trade publication Petfood Industry. The company reported revenue of $152 million last year, with 31% of its sales coming from outside Ukraine under the brands include Club 4 Paws, My Love/Gav, My Love/Miau, Optimeal and Master.
The EBRD gave Kormotech a loan of €10 million in 2019 to help it build its existing factory in Lithuania and a loan of €3.3 million in 2020 "to help meet working capital needs and ensure smooth operations despite the Covid-19 pandemic," the lender said.
