Page 113 - RusRPTNov18

southern Belgorod region, which at 100ha was the largest greenhouse project at the time , reflecting the trend of increased investment in Russian agriculture and the food industry, one of the best-performing segments and a major winner under the government's import substitution drive in response to Western sanctions.
One of Russia's largest producers of meat Cherkizovo that belongs to Igor Babaev and its subsidiaries submitted a request to the Federal Monopoly Service (FAS) to greenlight the acquisition of Krasnoyarskiy Broiler's assets . Krasnoyarskiy Broiler incubates broiler chicken eggs and is controlled by Prioskolye, Russia's third largest poultry market player. The acquisition would boost Cherkizovo's incubation capacities by 30% to about 300mn eggs annually, according to the representatives of the company. Analysts surveyed by Vedomosti e stimated the deal’s value at up to RUB1.1bn ($15.3mn) This would fully cover the company's need for incubated eggs and would leave excess capacity for sale to third parties. In summer 2018 Cherkizovo was hit by bird flu outbreak and full self-sufficiency with supplies of livestock helps to weather such supply shocks, the analysts note.
9.2.7 TMT corporate news
The Russian e-commerce market for physical goods will grow to $31bn by 2020 and may reach $52bn by 2023 – up from around $18bn (1,040bn rubles) in 2017, according to a Morgan Stanley report released last month. “Russia is the last major emerging market without a dominant online retailer. Russia is at an inflection point,” believe the Morgan Stanley analysts, who bet on the emergence of “a leader being worth $10bn” by 2020. The report underlines the high penetration rates of the Internet (80%) and smartphones (66%) in Russia, in contrast with a mere 3% e-commerce share in total retail. Besides, “there is a clear link between the number of years spent online and the willingness to transact online,” note the analysts, who “believe Russia [is] reaching a critical mass of ‘mature’ Internet users, which is driving a rise in the number of transactions online as users become more accustomed to them.” The report sees other growth drivers in the supply side. E-commerce projects have received significant funding over the past years from both private and public backers, and the trend should continue. “More funding should allow for more scale, helping retailers to drive down key pain points (such as fulfilment costs), and to improve delivery times leading to a better overall customer proposition,” Morgan Stanley believes.
113 RUSSIA Country Report November 2018 www.intellinews.com