A commercial dairy farm from the Arctic Region is searching for an investor able to help

According to farm’s Director Konstantin Drachuk, the commercial dairy farm Polyarnaya Zvezda was established in 1934 and until recently used to be one of the leading dairy enterprises in Russia. In 2013 annual milk yield per cow hit record high and exceeded 10 tons. The farm uses stall barn housing. Today its cattle population totals 1,400 heads, 650 of them are dairy cows. In 2013 the volume of milk production reached 5,500 tons, but later the yield dropped by 3-4 times. As explained the Director, the situation could normalize in case the farm had stable feed supply. Polyarnaya Zvezda doesn’t have its own processing facilities and sells milk to Severomorsky Molochny Zavod (single buyer) at the price settled by the latter.

From Mr. Drachuk’s words, the company got into a “jaw” determined by the earnings which depend on the volume of milk produced, milk selling price and company’s expenses. Over recent years price for fuel, seeds, feed, electricity increased multiply. Local water tariff increased by 8 times from January, 1st 2016. The enterprise economics was built in reliance on government support before April 2015, added the company’s head.

According to his words, the company fell victim to raider attack and greenmail on the part of several people and the situation lasts since 2013. During this time period it was decided to leave the manufacturing subsidiary in Murmansk Region which had full powers of the legal body. Together with that the OOO (LLC) changed the corporate seat to Gudermes in the Chechen Republic. The company planned to develop crop production and dairy farming there, and the Murmansk Reg government was interested in it, said Mr. Drachuk. The company’s top-management was sure that it will keep the government support in the full extent, but the Murmansk region government took another decision. Since that time the company tries to hold its ground in court.

Being on the edge of profitability, the farm decreased feed purchases, followed by yield, sales and earnings drop. From April 2015 the company started to accumulate debts, and from November 2015 the situation within the company’s personnel also worsened. Lack of money resulted in backdated wages, the staff started to rebel and this attracted the Mass Media. The farm continues operating, employees are working and get 1,000 rubles per day. The company plans to find resources to repay the debts and to start the sowing season. Now the enterprise is in a very difficult situation, said its head.

“We are searching for partners, investors, sponsors or corporate assistance and are interested in correct treatment of our situation in the media”, - said Mr. Drachuk.

Below are contacts for interested people able to support the enterprise Polyarnaya Zvezda:
http://www.milkstar.ru, E-mail: polarzvezda@gmail.com, +7 (815 53) 44 241

 According to Adviser of the First Deputy Governor of Murmansk Region Andrey Ivanov, the company’s executive team took a decision to return the company management to Murmansk Region, local government plans to renew the support, but it will take certain time.

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