’’MK Group’’ invests EUR 25 million more in agribusiness in Serbia – Planned increase in meat processing and sugar industry, as well as, silo purchase

(Miodrag Kostic and Carsten Mueller)
’’MK Group’’ company signed on Friday (13 June 2014) a EUR 25 million loan agreement with the International Finance Corporation (IFC), to be used for agribusiness development.

The agreement was signed by ’’MK group’’ President Miodrag Kostic and Carsten Mueller, IFC`s Associate Director for production, agriculture and services for Europe, Middle East and North Africa.

The funds will be directed to new investments in agriculture, meet processing and sugar industry, as well as to increase storage capacities of MK Group, Kostic told at a press conference in Belgrade. As he specified, the company plans to increase production in ’’Carnex’’, a leader in Serbian meat processing industry, and sugar factories ’’Sunoko’’.

- The Group plans to procure “New Holland” farm machinery, purchase new silos to increase the MK Group`s storage capacities, increase meat processing in ’’Carnex’’ and sugar processing in ’’Sunoko’’ factories – said Kostic.

The owner of ’’MK Group’’ reminded about great demand for pork meat on Russian market, due to the ban on import from EU an the USA. That is, as he told, a historical chance for pork producers in Serbia, which has to be used.

- We have already increased export of meat to Russian market, but there is still potential for it to grow. However, ’’Carnex’’ does not have capacities to meet the needs – said Kostic.

- We will invest in slaughter lines, but there is still lack of production and we could not satisfy the current needs. By virtue of this planned investment, about 200 families who raise pigs around Vrsac, will increase their business. They have already applied to do it together with ’’Carnex’’ and our animal feed factory.

The owner of ’’MK group’’ said he knows specific problems in meat export from Serbia to Russia, but he did not make any comments about details.

- I believe this is the best opportunity for Serbia in the previous twenty years and I hope to use it smartly. Russia showed a great interest for MK recently. We had more visits during last 4 months than ever. Even three ’’Carnex’’ companies could not satisfy the needs of raw meat and pork halves exports to Russia – said Kostic.

They expect 300,000 tons of sugar per year

Regarding sugar production, Kostic said that 200,000 tons were produced last year, while 300,000 are planned for this year. ’’Sunoko’’ company comprises factories in Vrbas, Pecinci, Kovacica and Bac.

Loan funds will be used to increase, first of all, capacities in Vrbas, as it is said at the conference.

However, since this year ’’Sunoko’’ gets sugar from a new factory for molasses processing, or desugarization, in Pecinci. Company invested EUR 20 million in this plant and the project perfectly progresses, says Kostic for eKapija.

- The plant started at the end of April, prior to the deadline. Currently we have test production. ’’Sunoko’’ will get between 35,000 and 40,000 tons of additional sugar here a year, from the waste, in fact, which is very useful.

Cooperation of MK and International Finance Corporation started in 2012, when IFC granted a EUR 45 million loan to this company. Now it is about a long-term loan and, although ’’an interest rate is a business secret’’, the arrangement includes attractive conditions explained Kostic.

- Additionally, this is a proof of IFC’s trust in the potential of ’’MK Group’’ which regularly settles its obligations. When you have a creditor like this in your portfolio, rating of your company immediately rises – said director of MK in his interview for eKapija.

IFC`s strategy in the region is based on agribusiness, said Associate Director Mueller, noting that around USD 700 million were invested to date. The corporation plans to continue its cooperation with interested companies across the region, he added.

- Over the past fiscal year, IFC invested more than USD 400 million in agribusiness in Ukraine, Moldova, Croatia, Turkey and Serbia. IFC operates with ’’MK Group’’ to support intensive economy development in Serbia and increase food production in the country and for the export, as well.

’’MK Group’’ is one of the leading holding companies in Serbia comprising 35 firms and employing around 5,000 people in Serbia and Ukraine.

Redundancy in ’’Carnex’’?

Apart from the fact that MK announced new investments and plans for meat processing industry in Vrbas, daily newspaper ’’Novosti’’ writes that ’’Carnex’’ company is to dismiss 72 people. eKapija could not officially obtain either confirmation or denial of this news on Friday.