The Guide to Business Partners in Eastern Europe  

16-A, Kievskaya Str., St-Petersburg, 196084, Russia
tel: +812 3162255
fax: +812 2986353

An effective route of investment in the Russian economy

At present in the global economy there is not a more promising source of highly profitable investment opportunities than the ever expanding and practically unexplored market of New Russia. This is something which has already been well realised by a great number of western enterprises who are rapidly expanding their businesses through co-operation with Russian business entities. This tendency is most obvious in the consumer and the agricultural markets. For example, a number of European firms have been involved in the Russian market of feed additives used in the production of balanced fodder for the poultry and cattle production (carbohydrate, mineral and vitamin rich concentrates, premixes.. etc.). In this market segment the firms developing most actively include names such as Provimi B.V.(Holland), Rehuraisio(Finland), Hoechst A.G.(Germany) and Koudijs Voeders B.V. (Holland). However, the development of this particular branch of the Russian market is limited by fierce competition between various firms/additives suppliers, combined with the relatively low demand for the product. The end users of additives consist of mainly fodder-producing factories and poultry/cattle farms. The low demand for the product on the Russian market is dictated for::

  • the factories - by a substantial rise of the price of fodder, mixed with imported additives. As there is a difficulty for the Russian fodder producing firms to market their product now, an increase in prices will make the situation worse.
  • the poultry/cattle farms-the absence of necessary equipment for effective injection of additives into the fodder. The ability to purchase such equipment is severely limited by financial difficulties affecting many farms.

A solution, quaranteeing markets for the additives-producing firms could be participation in financing constructions of a number of feed-producing shops equipped with high precision injecting machinery at poultry/cattle farms. A lot of poultry and cattle farms are already prepared to take part if the following terms are upheld:

  • Maximum total loan of USD 500 000
  • Annual interest rate of 10-15 %, repayment period of not more than 2 years.
  • Conclusion of long term contracts for supply of additives for a minimum period of three years.

"AGROESCORT" company-unique in Russia- builds small fodder combining plants, each one with construction costs not exceeding the above mentioned sum and complying with production standards acceptable throughout the world. Production of high quality products is achieved through application of unique technology and sophisticated equipment throughout the production process. From conception to implementation such a project will take no more than four months,whereas the costs are covered within no more than six months. To this date, twelve similar plants have been built and are successfully operational within different regions in Russia.

Our company, AGROESCORT, is prepared to present the necessary information about these farms interested in receiving an investment with terms as previously mentioned and in the event of reaching an agreement with a potential partner fully build a small fodder-combining plant.