China Construction Bank provides a loan to SDIC Zhonglu Fruit Juice to acquire 100% of APPOL Group

Project narrative

In or around 2018, the Beijing Branch of China Construction Bank Corporation (CCB) — issued a loan to SDIC Zhonglu Fruit Juice Co., Ltd. (SDICZL) — a Chinese apple juice concentrate industry company listed on the Shanghai Stock Exchange with Chinese state-owned State Development & Investment Corporation (SDIC) as its largest shareholder with a 44.57% stake — to finance its acquisition of APPOL Group. APPOL Group, consisting of Appol sp. z o. o. and Appol Bis sp. z o. o., was the leading independent apple juice concentrate manufacturer in Poland and the leading Polish not-from-concentrate juice (NFC) apple juice manufacturer. APPOL had three manufacturing plants, all located in the core apple planting areas of Poland (Łąkta Górna, Opole Lubelskie, and Potycz in Grójec region), with a total production of 18,500 MT fruit juice concentrates and 16,500 MT NFC juices in 2016, a capacity of nearly 2,000 tons of apples per day and a juice storage capacity of 22,000 tons. APPOL supplied juice products predominantly to European Union (EU) countries. APPOL was also involved in the processing of apples, raspberries, currants, and other fruits, The consolidated net sales revenue for 2017 was zł112.4 million PLN. On December 14, 2017, SDIC Zhonglu Fruit Juice Co., Ltd. (SDICZL) signed a definitive agreement to acquire the APPOL Group from its three founding shareholders for zł68.5 million PLN. The acquisition was expected to be completed in the first half of 2018. This would be SDICZL's first overseas acquisition of production plants outside of China. The acquisition was SDIC’s first investment in the Polish fast-moving consumer goods (FMCG) sector. This was the first acquisition under the Belt and Road Initiative (BRI). Exports assessed that SDICZL paid not only for the plants but access to enter the European market with their own fruit concentrates, which the EU had been putting tariffs on Chinese exports of it. On June 11, 2018, the acquisition was completed.