Uzbekistan: The European Bank for Reconstruction and Development (EBRD) lent 2.8 million to privately owned brewer Mekhnat Pivo to help it improve quality and double its beer production capacity, the bank said on 11 February, according to UzReport.

Uzbek beer sales have grown strongly for several years. Yet only a third of the beer consumed by Uzbeks last year was made locally and the rest was imported. Uzbek beer tends to be made region by region by a variety of local companies. The strategy of Mekhnat Pivo, which is based on the outskirts of the capital, Tashkent, is to establish good quality local brands and become the leading brewery for the whole of Uzbekistan, the bank said.

Uzbek buyers perceive beer as a refreshing summer drink. This means that up to 20% of sales take place in a single summer month. Mekhnat Pivo has already doubled its peak production capacity to 25,000 hectolitres a month in the past year. In January 2004, its business was separated from the established agro-firm Mekhat’s production of wine, mineral water and juice concentrates.

With the EBRD loan, Mekhnat Pivo now aims to double its peak monthly capacity again by mid-2005. The company will also step up its marketing activities and accelerate the establishment of a distribution network emphasising regional sales.

The EBRD has signed more than 220 agribusiness projects worth a total of 3.5 billion euros throughout central and eastern Europe and the Commonwealth of Independent States. Hans Christian Jacobsen, the EBRD’s Director for Agribusiness, said this project shows that the EBRD can cooperate with progressive companies in Uzbek agribusiness. We intend to increase our financing of this key economic sector, he added.

The loan is part of the “Early Transition Countries” (ETC) initiative launched by the EBRD last year to stimulate market activity in its poorest countries of operation by using a streamlined approach to financing more and smaller projects.

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