AFK “System” will enter into the five of the largest milk producers

More milk

The Board of Directors of Sistema, billionaire Vladimir Yevtushenkov on March 12 approved the development strategy of the holding. Agribusiness “the System” concentrated in the agricultural holding “Steppe”, which is engaged in the production of grain, milk, growing vegetables in greenhouses and gardening. The most ambitious plans of the company related to development of dairy production: a seven-year strategy provides for the increase from the current 35 thousand tons per year to 200 thousand tons in 2022, said the General Director of Agroholding “the Steppe” Konstantin Averin.

“Our task now is to consolidate these gains and further scale them. We look different options: option organic growth, when we are in the framework of one enterprise are opening a new dairy farm, and absorption of other companies,” he explained. The volume of investments in this direction, the Manager did not disclose.

Sistema engaged in dairy farming most recently in December 2015, the Federal Antimonopoly service (FAS) has announced that it has approved the holding of “step” purchasing 85% of JSC “Rodina” located in the Krasnodar region. This company produces raw milk. Its revenue, according to SPARK, in 2014 amounted to 1 billion rubles, and net profit of 222.3 million rubles, CEO of the industry Association “Soyuzmoloko” Andrey Danilenko previously been evaluated by the newspaper “Vedomosti” the cost of the entire business of “homeland” in the 0.9–1.1 billion rubles.

Increase production to 200 thousand tonnes of milk a year will allow “Steppes” to enter the top five largest milk producers in Russia, says a senior expert at the Institute for agricultural market studies Vadim Semikin. According to him, currently only two companies have comparable production volumes is “Agrocomplex them. N. And. Tkachev” (associated with the family of the Minister of agriculture of the Russian Federation Alexander Tkachev) and Russian-German company “EkoNiva-APK”. According to the Director “the Agrocomplex them. N. I. Tkachev,” Eugene Twigs, in 2015 the production volume of the company amounted to slightly more than 200 thousand tons “EkoNiva-APK” in 2015 produced 180 thousand tons, specified in the report. According to Semikina, in the coming years, the balance of the industry’s top leaders will not change much: “the Construction of large complexes can only afford major players dairy farming requires large investments with long payback period. And banks are now carefully evaluating new projects”, — says the expert.

Corn, cucumbers and tomatoes

Sistema started doing agribusiness in 2011, investing in grain production. Then the “System” bought agricultural enterprise “don” in the Rostov region with a total land area of 25.4 thousand hectares In 2012, the AFC has created one of the world’s largest grain producers, French Louis Dreyfus, a joint venture RZ Agro Holding. Both parties have contributed to grain assets in southern Russia, and the JV became one of the largest producers of grains and oilseeds in the region with a land Bank 99 thousand ha. Now under the management of “Steppe” is about 150 thousand hectares of land (including land for JV), the company is negotiating to buy more than 130 thousand hectares, said Averin. All approved on Saturday the strategy of agricultural development foresees the increase of the land Bank to 500 thousand hectares.

At the end of 2015 at the holding appeared a new direction — the Federal Antimonopoly service has approved the structure of AFK “System” the purchase of 85% shares in OAO “Labor” and LLC “Nursery “Gardens of Kuban”, which is engaged in the cultivation and sale of fruit. The area of these farms is 0.8 ha, and the volume of Apple production in 2015 amounted to 15 thousand tonnes Approved on March 12 the strategy of agribusiness development AFK “System” for the next 6-7 years provides for an increase of gardens on 1.7 hectares to 2.5 hectares. the Volume of harvest is expected to increase more than six-fold to 100 thousand tons.

Another recent acquisition of the holding is the largest in Russia agricultural complex “Yuzhny” with a size of 144 hectares of greenhouses, located in the Karachay-Cherkess Republic. On its purchase, it became known in January 2016. Now the agricultural holding is developing a plan for the modernization of agricultural complex, as in the last two or three years he worked at the level of break-even point, says Konstantin Averin. In 2015, the harvest amounted to 43 thousand tons of cucumbers and tomatoes, as a result of modernization it is planned to increase the harvest by half. The “South” has formed the market, the complex occupies a leading position on the market, and it has a high potential to improve efficiency, said earlier the representative of “the System”. He added that the Russian demand for agricultural products is growing, including because of restrictions on imports.