The project is sponsored by Mironovsky, a leading, privately-owned poultry integrator in Ukraine. Mr. Yuriy Kosyuk, a local entrepreneur, owns 96% of Merkaba LLC, which in turn owns 96% Mironovsky. Mr. Kosyuk serves as Chairman of the Board of the company. He graduated from the Ukrainian Food Institute in 1991 and that year started his first business, a small sausage production facility. Prior to launching his poultry business, Mr. Kosyuk was involved in various business activities, including exports of metals, import and manufacture of furniture, retail trading, and food processing.

Total project cost is estimated at $260 million. The IFC proposed investment is up to $80 million, consisting of A Loans of up to $60 million and equity of up to $20 million.

80.0 million (USD)

Product Line	IFC Investment (million USD)
Risk Management
Guarantee
Loan	60.0
Equity	20.0

* These investment figures are indicative

The main part of the project, a greenfield Mironovsky poultry factory will include a hatchery, broiler growing facilities and a processing plant and will be located in the vicinity of the town of Kanev. The company will also construct a greenfield further processing plant in the vicinity of Kanev to produce a variety of semi-finished products. To supply feed to the new poultry factory the company will expand and upgrade the existing Mironovsky feed mill and purchase and upgrade a feed mill located in the town of Katerinopol (about 250 km south from Kiev). More specifically, the project consists of the following: - Expansion of the existing Mironovsky feed mill to increase oil crushing capacity to 700 tpd, associated investments in sunflower storage (80,000 m3) and corn storage (60,000 tons); - Acquisition and upgrade of the Katerinopol feed mill with a feed line of 40 tph, soya bean processing line of 5 tph, silo for soya bean storage with capacity of 30,000 m3, and corn storage of 80,000 m3, with cleaning and drying capacity; - Construction of a further processing plant to produce a wide range of semi-finished and cooked products with installed capacity to produce 70tpd (18,200 mt per year, upgradable to 36,400 mt) on one line supplied by CFS (Holland). The product range planned by the company includes cutlets nuggets, wings, meatballs, ready-made chicken meals; - Expansion of Starinskaya parent stock farm to be equipped with 4 rearing and 8 production zones allowing placement of 129,000 DOC per production zone; - Construction of a new slaughter plant (Mironovsky Poultry Factory) in Kanev, with processing capacity of 10,000 birds per hour, upgradable to 20,000 birds per hour, and construction of a new hatchery and broiler growing sheds; - Expansion of transport/distribution capacity for feed, DOC and finished products to accommodate the project volume; and - Construction of new offices in Kiev.

The project will have the following development impact: - Production Scale The project will help the company to capitalize on the opportunities offered by rapidly expanding domestic poultry market and a change in consumer preference towards chilled products, and will allow Mironovsky to consolidate its leading position in the market through significant improvements in operating efficiencies. This will in turn improve the international competitiveness of the company and prepare it for the upcoming liberalization of the market that would follow WTO membership. - SME Development As part of the project, Mironovsky will continue to build its network of retail outlets in open markets under a franchise system. Under the terms of the franchising agreement, the company provides basic training for the franchisees, a consistent supply of poultry products as well as advertising and promotional support. Under the new project, the company expects to increase its network to about 3,660, thus further contributing to the development of a new class of small entrepreneurs, as well as the creation of jobs for an additional 6,180 persons, 75% of which will be women. - Technology transfer The company will demonstrate the impact of modern technology on technical performance and cost efficiency in the poultry sector. The development of a parent stock program, in line with the Government’s emphasis on animal genetics, will contribute to improve the technical performance of poultry breeding. - Employment and social benefits About 2,450 additional jobs are expected to be created within the scope of the project: 570 in the processing plant, 1,670 in farms, 180 in the feed and oilseed plants and 30 others. The company is offering compensation, including wages and performance incentives, well in excess of legal minimum wages in a rural area with few employment alternatives. For unskilled workers, compensation at Mironovsky is estimated at about twice what employees would earn locally. The project will also result in indirect employment. About 280 workers will be contracted for two years for the construction of the project facilities.

This is a Category B project according to IFC’s Procedure for Environmental and Social Review of Projects because a limited number of specific environmental and social impacts may result which can be avoided or mitigated by adhering to generally recognized performance standards, guidelines or design criteria. The review of this project consisted of appraising technical and environmental/social information submitted by the project sponsor. The following potential environment, health and safety and social impacts of the projects were analyzed:

- Environmental and social performance of existing operations;
- Land acquisition and permitting for expansion facilities;
- Quality and sustainability of potable water supplies;
- Air emissions and energy conservation;
- Management of liquid effluents;
- Management of solid waste;
- Existing and planned food safety and quality management systems;
- Hazardous materials management including refrigerants; and
- Occupational health and safety.

The sponsor has presented plans to address these impacts to ensure that the proposed project will upon implementation of the specific agreed measures, comply with the environmental and social requirements - the host country laws and regulations and the World Bank/IFC environment and social policies and the environmental, health and safety guidelines.
Location of environmental documents in locally affected community
- Katerinopolsky Combine Fodder Plant, LTD Administrative office 47 Lenina street, town of Yerky, Katerinopolvsky district Cherkasskiy region 20505, Ukraine - Mironovsky semi-processed products plant Administrative office 25 Zhovtneva street, village Stepantsy, Kanivskiy district Cherkasskiy region 19000, Ukraine