Roman Trotsenko’s structures are interested in purchasing A7 Agro

The structures of the founder of the AEON corporation, Roman Trotsenko, became interested in purchasing the Orenburg A7 Agro, which may have more than 84 thousand hectares of farmland. Agriculture in the region is carried out in a difficult climate, but high-quality wheat can be grown here, including for export to Iran, experts say.

JSC GC Azot, whose beneficiary in the market is considered to be Roman Trotsenko, received preliminary consent from the Federal Antimonopoly Service (FAS) to purchase the agricultural enterprise A7 Agro in the Orenburg region. Solution according to the petition appeared in the FAS database.

“A7 Agro” grows grain, vegetables, and is engaged in dairy farming. At the end of 2022, the company controlled 84.45 thousand hectares of farmland and owned farms for 1.3 thousand heads of cattle, the company’s reporting said. As follows from the Unified State Register of Legal Entities, A7 Agro beneficiary Sergey Levin and Nelly Levina also own the A7 Agro Processing meat processing plant, the A7 Agro – OMK dairy plant and the Letniy Lug chain of stores. Azot Group declined to comment; A7 Agro did not answer Kommersant’s questions.

For AEON founder Roman Trotsenko, whose fortune Forbes estimates at $3.2 billion, the purchase of A7 Agro could become the second major investment in the agricultural industry in recent times.

At the end of 2022, Aeon Agro, controlled by the businessman, bought it for 18.8 billion rubles. Trust Bank has the Rostagro agricultural holding with about 240 thousand hectares of agricultural land, mainly in the Penza and Saratov regions. This spring, at a meeting between Roman Trotsenko and Penza Governor Oleg Melnichenko, Rostagro’s plans were discussed (see. “Kommersant” from May 24).

BEFL Managing Director Vladislav Novoselov says that in the Volga region, as in other agricultural regions, there remains a steady demand for medium and large agricultural companies. For investors, the quality of management, a clear business strategy, and profitability are important, he points out. Investment banker Ilya Shumov notes that A7 Agro’s lands are located relatively close to Rostagro’s farms, so there may be synergy in the deal. The main question, according to him, is the possible value of A7 Agro’s assets. The Orenburg region is historically considered a risk farming zone, and judging by A7 Agro’s reporting for the last five years, the company received a net profit only in 2020, Mr. Shumov points out.

According to a Kommersant source in the market, A7 Agro could cost the buyer 4–6 billion rubles. Director of Sovecon Andrei Sizov considers the valuation of land with an area of ​​about 85 thousand hectares in the Orenburg region to be greatly overestimated.

According to him, the climatic conditions for agriculture in the region are extremely difficult: this season the region has experienced heavy rainfall, and past years were dry. In addition, the expert notes, distance from export terminals negatively affects grain prices. According to Pole.RF, third-class wheat in the Volga region on November 24 cost an average of 9.35 thousand rubles. per ton, in the center and south prices were at the level of 10 thousand and 12.33 thousand rubles. per ton respectively.

In 2024, Mr. Sizov adds, the situation may become even more complicated due to the planned restriction on the export of durum wheat, the main production of which is concentrated in the Orenburg region. Last week, the Russian government reported that the subcommittee on customs and tariff regulation supported the initiative of the Ministry of Agriculture on a temporary ban on the export of durum wheat from the Russian Federation from December 1 to May 31, 2024 (see. “Kommersant” dated November 1).

General Director of the Institute for Agricultural Market Studies Dmitry Rylko says that, despite very high risks, it is possible to harvest a good wheat harvest with high quality indicators in the Orenburg region. And in recent years, he adds, grain exports from the Orenburg region to Kazakhstan and Iran through the port of Aktau have been developing.

Anatoly Kostyrev