All agreed loans

Norway. Orkla ASA

Date of agreement: 4 Apr 2019
Country: Norway
Customer: Orkla ASA
Amount in EUR: EUR 90 million
Maturity: 10 years
NACE sector / loan type: Construction
Business area: Industries and services

Project

The loan has been granted to finance the construction of Orkla’s new headquarters in Skøyen, Oslo, and to fund the company’s investments in a new enterprise resource planning (ERP) solution.

Orkla House has been built according to the BREEAM-NOR Excellent standard for green buildings. The construction project received support for its environmental measures from Enova SF, a Norwegian government enterprise that promotes sustainable generation and use of energy.

The building will provide working places for approximately 900 employees, whilst the current head office hosts 600 employees.Consolidation of the workforce and energy savings will result in productivity gains for the company.

Orkla House became operational in March 2019. The total cost of the project is NOK 1.1 billion.

Further, the loan will co-finance Orkla’s investment programme “Project One”, aimed at establishing a single ERP solution. The project seeks to strengthen company’s competitiveness through enabling more effective work procedures across the organization by providing a common platform for sharing information, products and knowledge.

The total investments in Project One amount to approximately NOK 1.4–1.6 billion. It will be implemented between 2018 and 2022.

Orkla is a leading supplier of branded consumer goods and concept solutions to the consumer, out-of-home and bakery markets in the Nordics, Baltics and selected markets in Central Europe and India. In 2018, the Group had a turnover of NOK 41 billion, and approximately 18,500 employees by the end of last year.

Fulfilment of NIB's mandate

Productivity:

Orkla House is a 16-storey building with a total gross floor area of 21,000 m2. The new headquarters will consolidate workers from several offices located in Oslo, thus producing energy cost savings, not only due to increased energy efficiency, but also due to a significant decrease of area per employee.

Construction of new office areas is also beneficial for the market situation in the capital of Norway, where the commercial estate market has been enjoying strong rent level increases because of the favourable economic situation and low vacancy rates.

In addition, the Orkla House project might inspire other companies to aim for higher energy efficiency and office wellbeing standards.

Meanwhile, Project One will establish a single ERP solution for all Orkla’s companies under Orkla Foods, Orkla Confectionery & Snacks as well as Orkla Care. Currently, Orkla has a landscape of many different ERP solutions and lags behind most of its competitors in ERP sophistication.

Moreover, decentralized data management limits the potential for introducing modern information and communication technology solutions, such as artificial intelligence, machine learning and robotics.

Realisation of Project One is thus expected to have broad impacts on the company’s operations. It is estimated that implementation of a single ERP system would increase efficiency in the areas of procurements, logistics, manufacturing, finance, planning and sales.

Orkla has a significant economic footprintin the retail trade, wholesale, transportation and manufacturing sectors in the Nordic and Baltic countries. Therefore, its increase in productivity is expected to benefit the economies in the region.

Environment:

Orkla House will be certified in accordance with the BREEAM-NOR Excellent green building certificate—the second highest certification class affirming the sustainability performance of buildings.

In order to minimize the use of externally sourced power, the construction includes installations of photovoltaic solar cell panels on the roofs and outdoor fences. It is the first building in Norway with fence applications for solar panels.

Due to the central location, access to the building by public transport is easy. The building also includes bicycle parking as well as a parking area for charging electric vehicles.

Expected environmental impacts related to the investment:

BREEAM Excellent certified green building gross floor area: 21,000 m2

Renewable energy generation: +50 MWh per year

Sustainability summary

No negative environmental or social aspects have been identified in relation to the project.