Rusagro agreed to obtain control over a manufacturer producing Ryaba mayonnaise and Astoria sauces

Rusagro Group, a large oil and fats producer founded by ex-senator Vadim Moshkovich, is preparing to significantly expand its market share. The Group has agreed to take control of the NMGK Group of Companies, which produces Ryaba mayonnaise and Astoria sauces. Analysts see the deal’s prospects in expanding exports, noting that mayonnaise consumption in Russia is stable.

Rusagro Group of Companies is close to acquiring a stake in NMGK Group, a large producer of sauces and margarines, three sources told Kommersant who heard about the deal. This can be evidenced by the data of the Unified State Register of Legal Entities, according to which, from June 23 of this year, Yan Kubinsky, a former top manager of the Solnechnye Produkty holding, part of whose assets was transferred to Rusagro, became the general director of PKF Profit, which owns NMGK enterprises. Previously, PKF Profit was headed by Nikolai Nesterov, Managing Partner, Chairman of the Board of Directors of the NMGK Group of Companies. Together with another managing partner of the group, Nikolai Sidorok, he is considered a co-owner of NMGK.

Representatives of Rusagro informally told Kommersant that the group had signed an agreement to acquire 50% of NMGK from Russian shareholders and gain control of the business. According to them, the deal, which has not yet been closed, will allow NMGK and Rusagro to obtain synergistic effects on the fat and oil market, enter new categories and markets. In NMGK, Kommersant did not respond.

Rusagro produces oil and fat products, sugar, and meat under the brands Dream of the Hostess, Generous Summer, Chaikofsky, and Butcher’s Word. In 2022, the group’s revenue grew by 8%, to RUB 240.23 billion, EBITDA was at the level of RUB 45.01 billion. The oil and fat business provided 52% of revenue and 37% of EBITDA. Less than 50% of Rusagro as of March 2022 was owned by the structure of ex-senator Vadim Moshkovich.

The range of NMGK includes Ryaba mayonnaise, Astoria sauces and ketchups, Hostess margarines, soaps, snacks, and pasta. Manages oil and fat plants in Nizhny Novgorod and Samara and oil extraction plants in Uryupinsk and Sorochinsk. NMGK is co-owned by Wilmar International, headquartered in Singapore, a major producer and trader of palm oil, which also supplies sugar, flour, rice, etc.

Sources of Kommersant reported Rusagro’s interest in NMGK last fall, but then it was assumed that Wilmar’s share could become the subject of the transaction (see Kommersant dated November 21, 2022). Representatives of Rusagro say that they plan to focus their efforts on the development of NMGK brands together with Wilmar. Wilmar did not provide comment.

As follows from the Rusagro report for 2022, control over NMGK will allow the group to become the main mayonnaise producer in Russia, increasing its share from 15% to 28%, as well as occupy 33% of the consumer margarine and spreads market. According to a Kommersant source, the integration of NMGK into the structure of Rusagro may be completed before the end of this year. Marat Ibragimov, a senior analyst at Gazprombank, suggests combining purchases, sales, supplies of raw materials and management for better synergy. According to him, in recent years, the oil and fat business has shown growth in turnover and profitability; for Rusagro, this segment remains promising, including in terms of export development.

OleoScope analyst Kirill Lozovoy notes that per capita consumption of mayonnaise in Russia has remained at the level of 4.3-4.8 kg per person for the past five years and there are no prerequisites for a significant increase in the indicator. And the export of mayonnaise and sauces based on it in 2022 increased by 4%, to 97 thousand tons, due to an increase in supplies to Azerbaijan, Tajikistan and Uzbekistan, the Rusagro report says. Mr. Lozovoy adds that Rusagro has recently been planning to expand supplies to China and has created a separate line of mayonnaise for the market. Director General of the Institute for Agricultural Market Studies Dmitry Rylko says that the partnership with Wilmar can provide Rusagro with better access to the Chinese market. And the director of Sovecon, Andrey Sizov, believes that Rusagro can develop its palm oil imports to Russia and other EAEU countries by working with Wilmar.

Anatoly Kostyrev