Vekselberg goes into agriculture

Renova Group will invest 25 billion rubles in the construction of greenhouses.
Renova intends to build a greenhouse complex in the Sverdlovsk region, Perm Krai, Chuvashia and Komi, reported RNS Agency and confirmed by a representative of the group. According to him, the company intends to focus on tomatoes and cucumbers, with the design parameters the production will amount to 75 000 tonnes of finished products per year. Investment agreements with the regions the Russian group will sign during an investment forum in Sochi, which will be held on 27 and 28 February, said the representative of Renova.

Attempts to get comments from the representatives of these regions over the weekend failed. People close to the Komi, Perm region and Chuvashia administrations, confirmed there are plans to sign an agreement with Renova. The site of the Chuvashia's head of administration has information about the plans of the Cabinet of Ministers of the region to sign a memorandum of cooperation related to the creation of the greenhouse complex with Renova in Sochi.

This is the first project of Renova in the agricultural sector, said its spokesman. "The group considers the greenhouses a perspective direction of business in connection with the need to perform import susbtitution," he explained.

To start agricultural projects, Renova has chosen these four regions because, among other factors, the energy assets of the group are located there, said its spokesman. As explained the head of "greenhouse business" of power company T plus Dmitry Tulyakov, upon presenting a greenhouse complex project in Sosnogorsk, 35-45% of the production costs are expenses on energy and heat. "For this reason the Sosnogorsk District has been choosen, where a Sosnogorsk TPP [owned by Renova] is located; there will be enough capacity for the implementation of the project," the press service of the Republic of Komi quoted Tulyakov as saying.

The total area of greenhouses in four regions is around 100 ha, the investment will amount to 25 billion rubles, said the representative of Renova; the construction will take place in several stages and is expected to begin in 2017. The investment claimed by Renova is somewhat overstated, says CEO of research company Growth Technologies Tamara Reshetnikova: an average of 1 ha of greenhouses is worth 2 million euros excluding the engineering infrastructure and land purchase costs.

Reshetnikova believes that it is more expedient to implement similar projects in stages: first, to build a greenhouse complex in one region of 10-12 hectares, debug mechanism of its work and sales and then scale up. Otherwise, you may encounter serious problems, one of which is the shortage of highly qualified personnel, said Reshetnikova.

According to the National Fruit and Vegetable Union, in 2016 in Russia about 160 hectares of new greenhouses were put into work, although under the state program of development of agrarian and industrial complex for import there must be 260-280 hectares annually. The reason for this is the unavailability of loans, lack of state support and low wholesale price rise, noted the executive director of the National Fruit and Vegetable Union of Russia Mikhail Glushkov.

In the regions where Renova is going to build greenhouses, with the exception of the Sverdlovsk region, there's virtually no year-round production of vegetables, so it is a very promising area, says Reshetnikov.

No growth without state support

In November 2016, Rusagro Group owned by Vadim Moshkovich, abandoned the construction of a 100 ha greenhouse complex on 100 hectares: it felt the state support of agriculture in 2017 insufficient and froze the project for 24 billion rubles.