Wealthy Russian invest in agriculture

With the Russian embargo in place Abramovich junior decided to become a tomato farmer
Wealthy Russian invest in agriculture
24 August 14:05 2016 Print This Article

More and more incredibly wealthy Russians are getting involved in agriculture. On Tuesday, in Belgorod Oblast a project of the 22 year old son of tycoon Roman Abramovich for greenhouse cultivation named Greenhouse was approved, reports Russian newspaper Vedomosty with reference to the official website of the regional government.

According to the federal register, a person with a name Arkadiy Abramovich owns 99.99% of the shares of the Greenhouse via a company named Sigma Capital, while 0.01% belongs to Roman himself. By the end of 2017, Greenhouse plans to build 24 hectares of greenhouses for a total of RUB5,93 billion, reports Vedomosti citing a representative of the regional corporation Razvitie, the one managing the investment programme. The company will be able to produce over 19 thousand tones of vegetables a year.

By 2020 the company shall expand its territory up to 108 hectares, therefore, increasing its capacity to over 95 thousand tones of vegetables a year. According to the executive director of the Russian Union of Fruits and Vegetables Producers Mikhail Glushkov the total project investment accounts to 20/25 billion rubles. He also said that vegetables produced in the Belgorod Oblast have higher production costs than in the southern regions of the country due to high costs of heating and lighting. As a result, the project payback period may exceed 7-8 years.

With the Russian embargo in place the families and children of a number of Russia’s wealthiest and most influence figures move to invest in farming. For instance, in 2014 one of the founders of the phone operator Skartel (Yota brand) Sergei Adoniev bought 80% shares in agricultural company Tehnologii Teplichnogo Rosta (TTP), which since then operates two greenhouse complexes in Tyumen and Moscow regions with total capacity of over 19 thousand tones of vegetables a year. By 2020, TTP plans to increase its production to 90.000 tones. AFK Sistema of Russian billionaire Vladimir Yevtushenko at the end of 2015 acquired Russia’s largest greenhouse complex area called Yugnuy (140 hectares) in Karachay-Cherkessia. In addition, by the end of 2016, Vadim Moshkovich agricultural holding Rusagro will put into operation 100 hectares of greenhouses.

According to the Russian Union of fruit and vegetable, in 2015, the area of ​​greenhouses in the country increased by about 10% and amounted to 2.200 hectares. If state will continue to provide subsidies in this domain, Russia will be able to be 100% self-sufficient in vegetables by 2020, Glushkov said.

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