The founders of the agricultural group of companies “Damate” divided the business

The founders of the large producer of turkey, duck, lamb and dairy products, Damate Group of Companies, Naum Babaev and Rashid Khayrov, divided the business. Mr. Babaev received meat enterprises and farms, and Mr. Khayrov received the Molkom dairy plant. The separated areas had little synergy, and their further development requires different approaches, analysts say.

One of the founders of the agricultural group of companies “Damate”, Rashid Khayrov, left the capital of the parent company of the group MKOO “Damate”, it follows from the Unified State Register of Legal Entities. His 50% share in January 2024 was transferred to APK Damate LLC, a subsidiary of MKOO Damate. Another 50% in MKOOO was retained by another founder of the group, Naum Babaev.

Damat told Kommersant that Rashid Khayrov and Naum Babaev separated the business. Mr. Khairov remains the sole owner of Penzensky Dairy Plant JSC (“Molkom”), and Naum Babaev is the sole owner of Damate Group of Companies with assets in the production of turkey, duck, lamb and dairy farming. The concentration of owners in different markets will allow them to fully focus on areas, Damat notes. Other terms of the deal are not provided.

The first joint project of Naum Babaev and Rashid Khairov, as Forbes wrote, was the Rusmolko company, one of the large producers of raw milk. In 2012, the partners agreed to sell 75% of this business to Olam International of Singapore with an option to sell the remaining stake in 2019. At the first stage of the deal, Forbes wrote, Rusmolko was valued at $100–120 million, at the second stage – at $200–240 million, and Damate Group of Companies was created with the proceeds from the sale.

At the end of 2022, Damate produced 216 thousand tons of turkey meat in slaughter weight, occupying 52% of this market in volume, Agrifood Strategies and the National Association of Turkey Producers (NAPI) calculated. The capacity of the complex for processing duck is 16.5 thousand tons, lamb – 25 thousand tons per year. The brand portfolio includes the brands Indylight, Ozerka, BazarCo, Salima. Molkom’s processing capacity is up to 300 tons of raw materials per day, the range includes milk, yogurt, desserts, and baby food.

Damate has not disclosed its consolidated financial results in recent years. The revenue of the manager of the turkey meat production complex in the Penza region, Penzamolinvest LLC, in 2022 increased by 20.4% year-on-year, to 30.89 billion rubles, net profit was 1.14 billion rubles. Molkom’s turnover during this period grew by 16.2%, to 5.6 billion rubles, net profit was 331.1 million rubles.

Peregrine Capital Managing Director Dmitry Gabyshev explains that the classic separation scheme involves the valuation of the assets being separated, and then the recipient of the larger business can pay the partner the difference between the value of his share in the group and the value of the asset. President of the Svoe agri-food fund Andrei Danilenko adds that the different debt loads of the two directions were probably also taken into account.

Managing partner of Kasatkin Consulting Dmitry Kasatkin says that there is no strong synergy between the divided areas, and the main advantage when working within one group is general administrative and management costs and part of the sales costs. In general, the separation can be carried out relatively painlessly, although in the short term there may be a decrease in the profitability of one of these areas, he points out.

Senior analyst at Gazprombank Marat Ibragimov also considers the division logical. According to him, the production and consumption of turkey in Russia has the potential for further growth, while the dairy market is more stable and competitive and players need to focus on developing products with high added value and creating strong consumer brands. Although turkey meat producers, NAPI noted, in 2023 were negatively affected by an increase in production costs of 13–15% per year and a reduction in livestock due to the tense epizootic situation with avian flu and problems with the import of certain veterinary drugs.

Anatoly Kostyrev