Cersanit expands into

€ 80.8 million EBRD loan to establish new production facilities

The EBRD is providing a €80.8 million loan to Cersanit Invest, a wholly owned Ukrainian subsidiary of the Cersanit Group, the largest Polish manufacturer and distributor of bathroom fittings and ceramic tiles. Loan proceeds will be used to finance the establishment of green-field production facilities of sanitary ware and ceramic tiles in Novograd Volinskiy, in Zhytomyr region of . The Loan will comprise an “A Loan” of €40.4 million for the Bank’s own account, and a “B Loan” of €40.4 million which will be syndicated to commercial banks.

It is expected that a new plant, once put into operation, will be producing around 1 million units of sanitary ware and around 7 million square metres of ceramic tiles every year. A manufacturing facility in will significantly strengthen Cersanit’s market presence in the country and increase competition in the sector.

Currently almost 52 per cent of tiles and 25 percent of sanitary ware in are imported. Local production will substitute the supply of Cersanit products from its plants in and satisfy the increasing demand for sanitary ware in . This expansion will help Cersanit match an expected healthy growth in the domestic sanitary ware and tiles markets as ’s economy develops further.

The transfer of skills and know-how to the local building materials sector should have a strong demonstration effect in the central region which is suffering from unemployment and a lack of investment, said EBRD Director for Ukraine Kamen Zahariev.

According to Dragica Pilipovic-Chaffey, EBRD Director for and Baltic States, the Cersanit Invest project will support the cross border expansion of the dynamic Polish company to , where it has been successfully exporting its products in the recent years. “We hope that the project will be one of many investments in Ukraine by Polish companies and its success may lead to increased Polish investments in this country and the region”, she said.

In November 2006, the Bank signed a EUR 40 million loan with Poland-based Barlinek, a manufacturer of wooden floors, establishing the production facility in the Ukrainian Vinnytsia.
The European Bank for Reconstruction and Development is the biggest financial investor in . As of January 2007 it had committed €2.87 billion through more than 130 projects