Asia taps Russian milk

Источник: The DairyNews
Almost synchronously a number of Chinese, Thai and Vietnamese investors started tapping the Russian dairy market. As of today the result of work of Asian businessmen in Russia is as follows: the first farm of the company Zhongding was opened in the Primorye Territory (Priluki); construction of a livestock complex by TH true milk was launched in Moscow Region; it is also planned to build a complex for 80 thousand cows by Russian and Chinese investors in Ryazan Region.

In 2015 The DairyNews reported, that the Chinese Zhongding Dairy Farming was ready to invest 1.5 billion yuan into development of the dairy sector of Russian Primorye Territory (farm construction and milk processing). About eight months ago in Priluki (Primorye Territory) the first farm of the Chinese investors was opened.
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Asian investors start working with the Russian market with deliberation, but move to their goals rather stable: to produce milk on Russia’s territory.

Vietnamese TH true milk took the investment decision only after a complex of economic, soil, climate and social researches was done. For the first time it was announced about the investments in January 2015, the company moved to dynamic actions in early 2016 having registered a subsidiary company in Russia.
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The company came to a conclusion, that the increasing demand for dairy products in Russia, Russian and Vietnamese government support, as well as friendly relations between the two countries – is a good background for future victories in the industry. In Vietnam TH Group holds around 50% of the white milk market. It is estimated that the first TH Group’s products will come to the RF market in the middle of 2017.
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All together it is planned to build nine dairy-trading complexes and a milk processing factory.

Meanwhile the Russian Private Investment Fund together with the Thai company Charoen Pokphand Group (CP Group) and the Chinese company BannerDairy – Banner Infant Dairy Products announced intention to invest around $1 billion into construction of a dairy-trading complex in Ryazan Region (Russia).
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The Thai investor is already acquainted with the Russian market - Charoen Pokphand Foods (Overseas) LLC. was created in 2006 and is involved in compound feed production and livestock business in Russian Federation.
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It is known that the agreement on the project in Ryazan Region is planned to be signed in the presence of RF and Vietnamese Prime Ministers Dmitry Medvedev and Prayut Chan-o-cha. The project will include dairy farms for 80 thousand dairy cows, 40-60 thousand agricultural lands for grains and perennial plants production, as well as a compound feed plant and a milk processing plant with a capacity 400,000 tons of final dairy products per year. The project implementation period – 3-5 years.
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Last year within the Summit of Heads of SCO Member States it was announced that Charoen Pokphand Group plans to invest $600 million before the end of the year into milk and meat production in Russia. In autumn 2015 a meeting between Altay Region Government and the company’s top management was held. The parties discussed the project of milk production and processing facilities construction in Russia. Investors from Thailand also considered the Samara Region as a possible territory for the project, but have chosen the Ryazan Region.

In the meantime coordination of construction of the first for Russia Chinese livestock cluster has entered the final stage.  Two corporations from China - Tai Yuan and Hua-Fen – plan to grow cows in the region and to modernize two dairy plants. The Chinese investors’ attention is conditioned by the fact that Chinese agrarian holdings do not have enough land available for their projects, say some experts. After the Russian project in Primorye is implemented, the Chinese investors plan to arrange export to PRC in spite of the fact that the price for Russian products in China is often 2-3 times higher.

Recently the Primorye Government announced that a farm for 1,200 cows of an agricultural corporation from China may be built with the participation of businessmen from New Zealand. There are no details of the project yet, but probably it will become a part of the Tai Yuan and Hua-Fen project. Priority development areas (PDAs) are actively developing today in the Primorye Territory which provide their members with certain preferences. According to regional Mass Media, Chinese investors expect to be included into the PDA “Mikhailovsky”.
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30.01.2024
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