Page 122 - RusRPTFeb19

O'kay, Dixy, as well as gourmet retailers Globus and Azbuka Vkusa with premium product mix. Cutting out middle-men will increase Steppe's earning by about 15%, according to Neduzhko.
9.2.6 Agriculture corporate news
One of Russia's largest producers of meat Cherkizovo that belongs to Igor Babaev completed the acquisition of Altay Broiler poultry producer from Prioskolye for RUB4.6bn ($69mn) ahead of the open of China to Russian poultry exports, Interfax and Vedomosti daily reported on December 4. This makes the second recent acquisition by Cherkizovo from Prioskolye. bne IntelliNews previously suggested that Cherkizovo could be gearing up poultry capabilities ahead of the potential opening of the Chinese exports market. Russia plans to start supplying frozen poultry to China by the end of 2018, the Ministry of Agriculture said on November 7, claiming that Russian sanitary watchdog and China's customs have agreed on sanitary and veterinary requirements. At the end of 2017 Cherkizovo was valued at circa $2bn with 89.5% of the company’s stock controlled by the family of its founder Igor Babayev, after it bought a 21.05% stake for RUB12bn ($200mn) from the second-largest shareholder, leading Russian fund Prosperity Capital Management. In August the owners of Cherkizovo moved the Cyprus- registered assets from its offshore domicile to Russia. The Babayevs reportedly planned an SPO in April to be followed up by an additional share issue that will be bought back by the family, but the plans appear to have been put on hold. Another 8% in the group is controlled by Cherkizovo's partner in Tambov Turkey venture, Spanish Grupo Fuertes.
Russia’s agro-holding RusAgro puts in a flat year in 2018. The leading Russian agricultural holding RusAgro completed its harvesting campaign, having gathered 4,931,000 tonnes of grain, unchanged from last year, although the harvesting area grew 6% y/y to 533ha and yields decreasing by 6% y/y. However, within the companies business the company made progress. The beet sugar harvest was up 3% y/y, due to a strong harvesting yield in this subcategory thanks to the ongoing investment in the lucrative sugar business. In the grain subcategory, barley yields were in-line with analysts’ models, while wheat yields came 11% lower, as the yields were affected by bad weather last May and heavy rainfalls. Thanks to last spring’s inclement weather grain yields in general in Russia were down by 16% and the harvest fell 18% y/y. However, other factors conspired to make agricultural more profitable. “Lower volumes in Russia, global recovery in prices and a weaker local currency mean current prices are up in sugar beet, (19% y/y) wheat (20% y/y) and barley (47% y/y), prompting us to leave our forecast on EBITDA for 2019 intact at RUB 23bn ($344mn),” analysts at VTB Capital (VTBC) said in a note.
Russian agricultural holding RusAgro has reduced its sugar output by 11% on the year to 753,900 tonnes in the season that started on August 25, 2018 and ended on January 5, 2019, the company said in a statement on Wednesday. The company refined 5.2 million tonnes of sugar beetroot in the period, and the remaining sugar stock stood at about 651,300 tonnes as of the end of 2018, the company said. Russian companies refined 37.5 million tonnes of sugar beetroot in August–December 2018, cutting combined sugar output by 6% on the year to 5.7 million tonnes. The companies may produce up to 200,000 tonnes of sugar in January–June 2019, Rusagro said.
122 RUSSIA Country Report February 2019 www.intellinews.com