Rusagro Group, a major Russian producer of sugar, pork, margarine and mayonnaise, expects to produce more than half of its products in China in the future.
"In 7-10 years, the company intends to produce more than 50% of its products in China and become a Chinese company," says the Sberbank CIB analytical review. Rusagro gives priority to the consumer market in China, considering two channels of access to it: the conclusion of partnership agreements with local players and the construction of production facilities in China," noted in a review of VTB Capital analysts.
Earlier, the head of Rusagro Maxim Basov said that the group expects to make China the main market for its products. "We hope that sooner or later, the main market for our company will not be the Russian Federation, but China. We plan that over time we will sell twice as many products to China as in Russia," he said. According to him, first of all we are talking about livestock products, which will be supplied to China.
Taking into account the prospect that the China will open the market for the supply of Russian pork, Rusagro began to build a large industrial complex in Primorye. The company not only plans to export products to China, but is also considering the possibility of creating pork production in this country: "We have a project in China that has not yet been approved by the board of directors," said Maxim Basov on a telephone conference earlier in November. According to him, this project is even more promising given the losses of Chinese pig producers from African swine fever: local authorities are interested in increasing production at large modern complexes that comply with safety regulations. "But we are not in a hurry - this is a new and difficult market for us. It will take time until we agree and start investing, while we study the market and are doing legal work," the head of Rusagro said. According to him, the company may disclose the details of the project in the middle of next year.
In Russia, Rusagro wants to expand its business in the oil and fat segment (the company is planning a deal to acquire Solnechnye Producty company) and intends to enter a new dairy market for itself. In particular, Rusagro in 2019 may buy assets of Alev company, a manufacturer of butter and cheese. In the meat business, Rusagro plans to increase pork production from 205K tons in 2018 to 296K tons in 2019 and 377K tons in 2021, according to the Sberbank CIB analyst review.
Rusagro is the second largest manufacturer of sugar in Russia, the third manufacturer of pork, a major manufacturer of mayonnaise, butter and margarine. The group includes more than 35 agricultural enterprises, 9 sugar factories, an oil extraction plant and a fat plant, controls 686K hectares of land.
Source: agrovesti.net.
