November 22 2007, 09:54

"Frau Martha" purchased the capacity for canned fruits and vegetables production in Kuban

The group "Erkonproduct" purchased the production capacity on Crimean cannery complex; the company plans to organize the production of canned vegetables of the capacity up to 50 mln. jars per year. The investments to reconstruct the production capacities will amount to $7 mln. The company intends to allocate another $1 mln. to the development of raw material base. Several strong players have recently entered the segment of canned vegetables in Krasnodarskiy Kray; despite of this fact, the market experts do not expect for the competition to increase. They positively estimate the perspectives of Kuban project of "Erkonproduct".

Ilya Zafatayev, the Chief of Press Service of "Erkonproduct" group of services, informed "Kommersant" that the sales of the part of Opened JSC "Crimean Cannery Complex" were finished past week. The company purchased a workshop for production of frozen vegetables and a number of related objects, including the storage with cold chambers designed for 2,000 tons of vegetables. "Erkonproduct" purchased the premises and facilities of the total square of 5486 sq. meters. The land plot square is 2.2 ha. On this territory the capital company intends to organize the production of canned vegetables of the designed capacity of up to 50 mln. jars a year. To do that, next year the company plans to invest more than $ 7 mln to reconstruction and modernization of the production capacities, and also to extension of raw material base. This sum includes both own assets and credit funds. The company will spend around $5 mln. for the purchase of new production lines. After the reconstruction a new plant will be able to process up to 10,000 tons of vegetables per hour.

"Erkonproduct" plans to allocate $2 mln. to the development of raw material base - the enterprise will invest one half of this sum to the development pf agricultural enterprises of Crimean district. According to evaluations of "Erkonproduct" specialists, the cultivation areas should be not less than 2,500 ha for the plant to reach the designed capacity.

"Erkonproduct" plans to produce first shipment of products as soon as next year. Initially the enterprise plans to can green pea and corn. In perspective, the company will extend the assortment of products and will start grow and process pepper, onion, cauliflowers. It is interesting that exactly this segment of canned vegetables is of the greatest interest for the investors: eleven companies are engaged in the same production in Kuban, including such large players like Bonduelle, Baltimor, Cecab, "Kubanskiye konservy".

Despite of the presence of powerful companies in the region, the market experts positively estimate the perspectives of Kuban project of "Erkonproduct". To the opinion of Mikhail Burmistrov, the Manager of Analytics Department of INFOLine information-consulting company, from the point of view of investments the organization of production capacities exactly in Krasnodarskiy Kray seems feasible primarily due to the presence of the sufficient raw material base. "Krasnodarskiy Kray produces around 4% of the total volume of gross vegetable harvest in Russia - based on this parameter, this region occupies the third place after Dagestan and Moscowskaya region".

According to observations of the Institute of Agrarian Market Conjuncture, the boom of the increased production capacities is recorded now in the segment of canned vegetables production. "Almost all investors are oriented on the production of canned green pea and corn", Dmitriy Rylko, the General Director of IКАR points out. To his opinion, this niche is oversaturated with the players. He believes, Kuban project of "Erkonproduct" may become profitable if the company does not limit the production by green pea and corn, but also extends the production assortment by means of processing of other vegetable crops.

We'd like to remind that you will learn about the main achievements and trends of market of canned fruits and vegetables during the fourth international conference-exhibition "Fruits and Vegetables of Ukraine 2007. Meeting New Leader" on the 4th-6th of December 2007 in Kyiv on the territory of the National Complex "Expocenter of Ukraine". The largest players of this industry will participate in the event. There are only two days left to submit application forms of the conference participants!