OREANDA-NEWS. August 06, 2010. The EBRD is stepping up its engagement with the wooden floorboard and pellet producer Barlinek SA by extending a EUR10 million loan to the Ukrainian subsidiary of the Polish company. Barlinek SA, listed on the Warsaw Stock Exchange and majority-owned by the Polish businessman Michal Solowow, is one of the most dynamic companies in Central and Eastern Europe and after opening production facilities in Ukraine in recent years is currently also expanding its sales into Russia, reported the press-centre of EBRD.

The EBRD loan will allow the company to continue its growth strategy under the current economic constraints when financing of operations in Ukraine by commercial banks in Poland or locally in Ukraine is not available on the market. The new EBRD loan will provide the Ukrainian subsidiary Barlinek Invest LLC with working capital which will help the company to avoid scaling down its business and reducing activities.

Barlinek was successfully privatised in 1999 and has since become the biggest Polish floorboard producer and the third largest multi-layer wood floorboard producer in the world. The company has production facilities in Poland, Ukraine and Romania and is selling its products in 50 countries on four continents. Despite the global economic crisis, 2009 was the best year in the company’s history as Barlinek responded swiftly to the challenges.

“With our loan we intend to further support the impressive performance of Barlinek and give a clear signal that we are standing by our partners in these challenging times”, EBRD managing director Alain Pilloux said. “We must not allow the crisis to interrupt or even reverse the growing regional economic integration of which companies such as Barlinek are frontrunners. We are especially encouraged by recent successful forays of the company into Russia and we stand ready to support the efforts to tap the huge potential of this market.”

The EBRD loan comes under the EUR250-million Mid Size Corporate Support Facility adopted by the Bank in February 2009 with the purpose to address funding shortfalls of existing clients caused by the global financial crisis. Barlinek is a long-standing client of the EBRD and has received two loans by the Bank in 2006 and 2008, respectively, to support the company’s regional expansion.

In addition, the EBRD holds an equity stake in the Ukrainian subsidiary Barlinek Invest LLC. In Ukraine, the company produces floorboards and pellets in its Vinnytsia plant and pellets in its facility in Kosiv. Pellets are bio-fuel produced from sawdust and especially successful on Western markets: Barlinek’s entire 2009 production of 24.500 tonnes was sold on EU markets before the pellets were even produced.