OREANDA-NEWS. April 28, 2008. The EBRD is acquiring a 34 percent-stake in the dairy producer Siut Bulak to support the Kyrgyz company’s expansion, reported the press-centre of EBRD.

The investment will be used for the expansion of a state-of-the-art processing plant in the Tiup region, located in the eastern part of the Kyrgyz Republic. The programme will compliment an initiative launched at the end of 1995 by the Government of Switzerland to revive the local economy in the region.

Local farmers will benefit from the increased capacity of the plant which will allow for the procurement of more milk from local farmers. Implementation of the expansion plan will also enable the company to widen its range of high quality products and will support Siut Bulak’s strategy to continue its growth in Central Asia and to enter the Russian market.

Kenji Nakazawa, EBRD head of office in the Kyrgyz Republic, said the Bank was supporting Siut Bulak because of the company’s strong potential. “Local workers and farmers will benefit from the expansion of the diary producer and so the project demonstrates our commitment to the development of the rural economy in the Kyrgyz Republic.”

Hanspeter Maag, Country Director and Head of the Swiss Cooperation Office in the Kyrgyz Republic, welcomed the EBRD’s investment. “This decision underpins the success and growth prospects of an ambitious development project which has successfully been turned into a profitable company”, he said.

Some 1,250 families from the Tiup region supply the dairy with milk, thus obtaining a guaranteed regular income. The plant is currently processing up to 45,000 litres per day during summer. The dairy mainly produces cheese and butter and its products are popular in the Kyrgyz Republic and also exported.

As the company is now profitable the Swiss Government as majority shareholder will gradually disengage from the company. “The EBRD’s entry is not only a first step in implementing this strategy but seen as a guarantee for continued support by an experienced investor and responsible shareholder”, Mr Maag said.

The EBRD finance comes under the Bank’s Early Transition Countries Initiative, which was launched in 2004 to stimulate market activity in the Bank’s lowest-income countries of operations by using a streamlined approach to financing more and smaller projects, mobilising more investment, and encouraging economic reform.

In the Kyrgyz Republic the EBRD to-date has invested over \\$200 million in more than 50 projects across the country.