"Agro Farm Capital" will invest over 6 billion rubles in the construction of dairy farms for 9 thousand cows
The company "Agro Farm Capital" plans to build two dairy farms for 2.5 thousand cows each in Leningrad region. This was told about to PROVED by some participants of the market. The company confirmed that they are discussing possible options for the location of production with the government of the region. Other comments were declined.
Earlier, “Agro Farm Capital” announced the construction of two dairy farms in Pskov region for 4.1 thousand cows. In addition, according to PROVED, the possibility of creating enterprises in Novgorod region is also being considered.
According to experts’ estimations, the necessary investment in the project in Leningrad region will exceed 6 billion rubles. "A lot depends on the equipment and technologies that will be implemented in production. For example, a robotic farm for 2.5 thousand cows can cost 5.5 billion rubles", — said the managing partner of the Agency Agro&Food communication Ilya Bereznyuk.
The capital of LLC “Agro Farm Capital” is divided between three citizens: 9.1% is owned by the British David Fletcher, 36.4% - by the US citizen Philip Way and 54.5% is controlled by Philip Way’s wife — a citizen of Russia Nadezhda Way. Philip Way earlier managed the confectionery factory named after N.K. Krupskaya, worked at Kraft Foods, Dirol-Kadbury, Jotun Paints. David Fletcher is an international consultant working for PricewaterhausCoopers, Deloitte Touche.
Leaders of the Industry
The total volume of production of the new player may exceed 70 thousand tons of milk per year - it is 4% of the total milk production in the North-West, which will ensure that the company gets into the top three players of the North-West Federal district.
Now the leader in milk production in the North is Pskov agricultural holding "Slaktis" owned by Dmitry Matveev with a production volume of more than 110 thousand tons of milk per year. The plans of the holding "Detskoselsky" (owned by Yuri Braginets and David Traktovenko) to increase the number of cows from 11 thousand to 15 thousand by 2019, which will allow increasing milk production from 70 thousand to 100 thousand tons per year. Controlled by the management St. Petersburg dairy plant "Piskarevsky" plans to increase production from 100 thousand to 115 thousand tons. The Holding "Terra Nova" owned by ex - owner of the Baltic Bank Andrey Isaev produces about 35 thousand tons of milk.
The dairy paradox
LLC “Agro Farm Capital” is going to deliver milk to processing plants of Danone concern and dairy plant “Galaktika”.
Experts estimate the payback period of investments in dairy farming at 7-12 years. Profitability depends on a large number of factors: the availability of own land for forage production, credit load, the level of modernization of enterprises, etc. It can range from 0% without state support to 20% on complexes that are not burdened with credit load and are out of the investment phase, noted in Soyuzmoloko.
The dynamics of milk consumption can have a negative impact on the payback period: due to the decrease in real incomes, Russians reduce the consumption of milk and dairy products.
The consumption of dairy products in Russia in terms of milk required for their production (kg per person per year):
2012 — 249
2013 — 248
2014 — 244
2015 — 239
2016 — 236
2017 — 233
Due to the fall in demand in 2017, for the first time in a long time, the production of dairy products showed a negative trend: the production of drinking milk and cottage cheese decreased by 1.5%, the production of dairy products fell by 1%. Excess amounts of milk producers delivered for the production of milk-consuming products such as butter, cheese and cheese products and milk powder.
As a result, by the beginning of 2018, huge stocks of these products had accumulated in the warehouses of enterprises, and the prices of milk, which were kept at a high level (25 rubles with VAT per liter) for the whole 2017 year, went down. By July, the cost of a liter of milk fell to 22 rubles.
Imports of milk powder and palm oil contribute to the fall in prices: cheap raw materials, which milk processors use to replace whole milk to reduce costs. Belarusians supply milk powder for 100 rubles per kg, which is 2.5-3 times cheaper than Russian analogues, complain market participants.
According to experts, 60% of Russian cheeses are made using vegetable fats instead of animal fats. To prevent this outrage, the Rospotrebnadzor ordered manufacturers to label products with the replacement of milk fat with vegetable fat more than 50% with an inscription: "milk-containing product with a substitute for milk fat" since July 15.
Recovery in export
In the current conditions, according to experts, increasing milk exports is a priority for milk producers in the short term. "We see serious prospects in this direction under the conditions of limited effective demand in the country", — note in the National Union of milk producers "Soyuzmoloko".
However, while Russian exports of milk and dairy products is negligible. Ice cream and cheese products are mainly exported from Russia to neighboring countries.
Marina Petrova, General Director of "Petrova Five Consulting»:
Milk producers, investing in the development of farms, think, first of all, not about today, but about the potential that the market has. For example, markets of cheese, butter and milk powder were never import substituted. Many manufacturers today are increasing capacities to build processing plants, which are, by the amount of investment and the payback period significantly, lower than the farm. In the cheese and butter segments, imports are about 30%, while in the segment of milk powder and whey - 50%. Import substitution can be considered as realized in whole milk and fermented dairy products, where the share of imports does not exceed 10%. Export today is objectively at a low level. Russia still does not supply the world market with milk-consuming products that have a huge export potential. But, unfortunately, until prices in the Russian dairy market decrease and reach the same level of the world prices, it will be difficult for Russian dairy producers to develop in this direction.
Цитаты дня
