Raiffeisen Bank starts to offer Ukrainian business financial guarantees to facilitate deliveries from EU to Africa
MOSCOW. July 28 (Interfax) - Raiffeisen Bank has granted financial guarantees of 830,000 euros to Ukraine's AVA Group to facilitate the delivery of compound feed produced in Belgium to African countries (Tanzania) and stands ready to offer this service to support Ukrainian producers' operations across the world, Ukrainian media said, citing the bank's press release.
"Other businesses may also use the service of guarantees for the import of goods that are not brought into the territory of Ukraine. Companies may order the production of goods in one part of the world and deliver them to another. As for geography, there are no limits: the scope is from Europe to Asia, Africa, Latin America, and North America," the bank said.
The first recipient of this service was AVA Group, which is one of the leading compound feed producer, it said. The group of companies has relocated its production to Belgium because of the crisis. Its Belgian-based enterprise manufactures semi-processed components for compound feed which are transported directly to Tanzania, where the end-product is made for the local market and other African countries at a leased factory.
"This option allowed us to reduce the duration of the logistics route from 40 to 25 days, cut the cost of delivering every container with produce from 6,000 euros to 2,500 euros and reduce the expenses on buying compound feed components, which cost less in Europe than in Ukraine. On the whole, the expansion of operations on the African market, which has many vacant niches and high profit margins in the food sector, is a promising opportunity for Ukrainian business," AVA Group President Maxim Shevchuk said.
Raiffeisen Bank Deputy CEO Larisa Bondareva said that for AVA Group the financial institution has worked out a solution that includes guarantees, expertise and consultations on the specifics of running a business on the markets of the European Union and Africa, payment transactions, the servicing of forex operations, and comprehensive forex services, which is made it possible to secure maximum cuts of the financing and commission rates and subsequently of the costs.
The solution allowed the Ukrainian company to avoid using its own circulating funds to make advance payments and to boost the Belgian contractor's confidence that it will be able to receive all 100% following the manufacturing and delivery of products, the bank said.
AVA Group (formerly AgroVet Atlantic Group of Companies) was established in 2006. Initially, it specialized in the import and distribution of French and British compound feed supplements and Spanish maintenance and ventilation equipment for livestock complexes. Subsequently, it built two factories in Ukraine to make compound feed for pigs, cows and poultry. AVA Group also has a pig farm and a KPC genetic company, develops an international feedtech company, and applies digital solutions to livestock feeds. AVA Group runs a livestock business in Tanzania.
JSC Raiffeisen Bank was registered in Ukraine in 1992 and is today one of the country's largest banks with foreign capital. The bank joined Austrian banking Group Raiffeisen Bank International AG in October 2005. Raiffeisen Group owned 68.21% of the bank's shares, and the European Bank for Reconstruction and Development 30% of its shares as of March 31, 2023.