Frikom extension

completed

Agrokor is the leading food producer and retailer in CEE region. Agrokor’s Serbian subsidiary, Frikom, established in 1975 as a frozen food branch of PKB (Government Food Institution), was acquired by Agrokor in 2003 through a privatization program. It is engaged in vegetables farming, ice cream, frozen vegetables and pastry manufacturing, packaging and distribution. In 2008, Frikom acquired Nova Sloga in Trstenik, central Serbia through a privatization deal, for its potential in fruit and vegetables packaging and its mineral water source. Nova Sloga was established in 1953 and changed ownership structure in 1998 to a Public Enterprise (Srbijasume); in 2008, it was privatized by Agrokor and is considered to be the most successful privatization in Serbia. Nova Sloga owns exclusive rights to the groundwater source of the Veluca aquifer with a high mineral content sold under the brand name Mivela. Nova Sloga’s existing bottling line was relocated to Trstenik from Agrokor’s Kiseljak mineral water plant near Sarajevo. The proceeds of the proposed investment by IFC shall be used to match the long-term nature of the following structural investments (which were initially financed by IFC by way of an eighteen-month loan in June 2009) through longer term financing: (i) at Frikom: increase in the production of frozen vegetables (green peas, green beans, carrot, sweet corn, etc) from 7,000 tons/year to 11,000 tons/year; increase the production of frozen fruits (strawberries, raspberries, blackberries, sour cherries, plums) in synergy with Nova Sloga, through contract farming with about 250 farmers in the Rasina region, near Trstenik; and, purchase and installation of a production 10 million additional ice cream cones (per year); and (ii) at Nova Sloga: a new storage facility which will be the first modern retail outlet in the Rasina region, increased production of frozen fruits (strawberries, raspberries, blackberries, sour cherries, plums) to be sourced through contract farming with local farmers; and increased production of fresh vegetables (tomatoes, peppers, spring onions, cabbage, potatoes) and fresh fruits (mainly plums) for sale to supermarkets to be sourced from about 300 contract farmers in the Rasina region, near Trstenik.