Sodrugestvo Group of Companies will engage in oilseed processing near Krasnoyarsk

The Kaliningrad Group of Companies Sodrugestvo, a large processor of soybeans and rapeseed, is planning expansion into Siberia. The group structure acquired an enterprise in the Krasnoyarsk Territory for the production of flour and rapeseed oil, including for supplies to the Chinese market. More than 10% of all rapeseed in the country is harvested in this region, but the export of oil is complicated by foreign exchange duties, experts say.

Sodrugestvo-Sibir LLC, part of the Sodrugestvo Group of Companies, in January became the owner of grain and oilseed processor Khozyain LLC in Achinsk, Krasnoyarsk Territory, follows from the Unified State Register of Legal Entities. According to the city’s investment portal, the complex’s capacity is more than 10 thousand tons of flour per year, the products are also exported to Mongolia. The Agricultural Analytics Center also reported on the company’s plans to increase the production of rapeseed oil to 45 thousand tons per year from 9 thousand tons in 2020. “Commonwealth” and “Khozyain” did not answer Kommersant.

Sodrugestvo Group of Companies is one of the main processors of soybeans and rapeseed in Russia. The main assets, including three oil extraction plants and a port terminal, are located in the Kaliningrad region. There is also a complex for processing oilseeds in the Kursk region. In 2021, Forbes estimated the wealth of Sodruzhestvo owner Alexander Lutsenko and his family at $1.2 billion.

A Kommersant source on the market notes that Khozyain may be of interest to Sodruzhestvo as a launching pad for the development of rapeseed processing in the region. Partner of the consulting company NEO Stanislav Mudrov estimates the cost of 100% of Khozyain LLC at 150–250 million rubles. In 2022, the company’s revenue decreased by 61.3%, to 813 million rubles, gross profit decreased by 40%, to 90 million rubles. The profitability of grain and oilseed processing is highly sensitive to costs, in particular for the purchase of raw materials with a limited increase in selling prices, says Stanislav Mudrov.

Sovecon director Andrei Sizov notes that given the growing role of Siberia in the production of rapeseed, Sodrugestvo can increase the processing of this crop in the region, primarily for export to China. But, the expert warns, local processors have to compete for raw materials with the direct export of rapeseed allowed through the Zabaikalsk checkpoint. According to the regional Ministry of Agriculture, in 2023, more than 403 thousand tons of rapeseed were harvested in the Krasnoyarsk Territory – over 10% of the harvest in Russia as a whole. In 2024, the area under rapeseed in the region is planned to increase by 23.3%, to 265.5 thousand hectares.

According to Agroexport, in 2023 Russia increased the volume of rapeseed oil exports by 72% year-on-year, to 1.7 million tons, the cost of supplies increased by 20%. Agroexport does not provide an estimate of exports in money. Exports to China in 2023 increased 2.2 times, to 1.46 million tons. The Oil and Fat Union associates the growth in production and export of rapeseed oil with a record harvest and restrictions on the export of raw materials. In the 2023/24 season, according to the Union’s forecasts, about 1.4 million tons of rapeseed oil will be produced in the Russian Federation.

OleoScope agency analyst Kirill Lozovoy says that at the moment, quotations for rapeseed oil on the world market are rising in anticipation of a reduction in supply in the second half of the season. According to OleoScope, average prices for rapeseed oil (FOB) rose to $957 per ton in March from $918 per ton in February. But, Mr. Lozovoy adds, the export of rapeseed oil from Russia complicates the effect of the exchange rate duty.

Large investors in the agricultural sector have recently been interested in entering Siberia. Thus, in 2023, a structure associated with the Irriko Group acquired the Komsomolets agricultural holding, which also grows rapeseed. Investment banker Ilya Shumov adds that in 2023 the construction of a rapeseed processing plant in Krasnoyarsk was announced by Legendagro Group and such projects will create conditions for further growth in the production of this crop.

Anatoly Kostyrev