Rusagro goes to the sea
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A new terminal for the export of vegetable oils on the Black Sea may appear in Russia. Rusagro is planning such a project in Tuapse, which will allow the group to reduce logistics costs and expand deliveries to large markets. There is a need for new capacities, taking into account the increase in production and export of butter, but experts see the risks of a shortage of raw materials and complicating competition in the world market.
Rusagro Group plans to build a terminal for transshipment of vegetable oils and fats on the Black Sea in Tuapse. This follows from the request for proposals placed by the Rusagro structure for the development of a project for such an object. In February, the group also posted a vacancy for the head of “one of the largest in Russia” oil and fat projects in Tuapse, calculated until the end of 2025. Two Kommersant sources in the agricultural market and an interlocutor in the transport industry also know about Rusagro’s plans to build a terminal here. Rusagro declined to comment.
Rusagro is one of the largest producers of oil and fat products, sugar and meat in the Russian Federation. In 2022, the group’s revenue increased by 8%, to RUB 240.23 billion, EBITDA was 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 largest specialized deep-sea terminal for transshipment of vegetable oils with a capacity of 1.5 million tons in Taman is owned by Efko Group, one of Rusagro’s competitors in the oil and fat market. Also, there is an infrastructure for transshipment of oils in the port of Novorossiysk, which Rusagro uses with other companies, says a Kommersant source in the industry. Another interlocutor of Kommersant noted that the Rusagro terminal could be comparable in capacity to the Efko facility. In 2022, Rusagro exported 554 thousand tons of industrial oil and fat products, including 326 thousand tons of crude oil. One of Kommersant’s interlocutors says that the group may need a partner to fully load the terminal.
Andrey Sizov, director of Sovecon, believes that the terminal may be in demand by Rusagro, primarily for its own exports, in order to save money on transshipment fees.
Marat Ibragimov, senior analyst at Gazprombank, notes that its terminal will allow Rusagro to increase the supply of vegetable oils to the Black Sea and enter the large markets of Turkey, the Middle East and North Africa. It is logical to build such an object with a reserve of capacity, he points out. According to him, the group has enough funds and, when other capital projects are completed, there should be no problems with financing. At the end of 2022, Rusagro had 21.47 billion rubles. cash and cash equivalents.
A Kommersant source on the market notes that a new deep-water specialized oil transshipment terminal is necessary given the current restrictions on the export of oilseeds, the potential to increase exports of oil and fat products and expand the number of importers.
But, the interlocutor of Kommersant notes, there may be a lack of free space in Tuapse, and the only way to deliver goods is by rail, which imposes its own limitations.
According to Sovecon, in the first four months of the season since September 2022, the Russian Federation exported 635 thousand tons of oil. The largest buyers are Turkey, China and India, which increased purchases of Russian oil due to interruptions in supplies from Ukraine. The US Department of Agriculture (USDA) estimates oil exports from Russia this season at 4 million tons, which is 900 thousand tons more than a season earlier.
According to Mr. Sizov, the main risk for increasing the export of oils is a possible shortage of raw materials in 2024-2025 with a reduction in the area under oilseeds and taking into account the emergence of new processing capacities. In addition, the expert adds, sooner or later vegetable oil from Ukraine will return to the world market, which will complicate competition for Russian companies.
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