April 7 2008, 17:31

Fruit importer "Sorus" to construct warehouse terminals

"Sorus" group, one of three largest fruit importers in Russia, announced about the plans to spend money before the flotation of the bonded loan worth to RUR 1.5 billion ($62.5 mln.), RBC Daily informs. In addition to the debt refinancing, the company is intended to invest funds to the construction of the logistics terminals in Chelyabinsk, Kostroma, Penza, and Kazakhstan, to finish the establishment of the warehouse complexes in Moscow and Irkutsk, and by 2010 - in Belarus and Surgut. Also, the group intends to extend the banana plantations in Ecuador twofold up to 2,300 ha, and to expand the transport park. The analysts forecast the market share of "Sorus" company to significantly increase; but, the market players think, these steps will help to just preserve the same share.

The company's plans about the investments were released in the memorandum on the second bonded loan of "Sorus" for the sum of RUR 1.5 billion. This loan is planned for April the 10th. The company will allocate the funds as follows: RUR 575 mln. - for the debt refinancing, RUR 466 mln. - for the terminal construction, RUR 244 mln. for the increased park of vehicles and the fleet update, RUR 150 mln. - for the purchase of land in Ecuador and RUR 67.5 mln. - for the construction of the production facility in Belarus. Svyaz-Bank, the organizer of the bonded loan, forecasts the first coupon rate of the bonds to occupy the level of 12.8-13% per annum. "Such rate of return is affordable for the issuer", Mikhail Avtukhov, Vice-President of Svyaz-bank observes. The annual offer is provided for the loan. "Initially we planned to make it longer, but in the present-day market situation the investors are not interested in the long-term debts", Mr. Avtukhov says. The first company's loan on the sum of RUR 1.2 billion has been already in circulation; the loan repayment is planned for 2009.

The experts consider "Sorus" investments to be quite logical. If the own plantations in Ecuador are evaluated now, the company significantly lags behind the competitors. "Sorus" owns 1,270 ha; judging from the company's informational memorandum, JFC group possesses 2,000 ha, Sunway group has 3,000 ha. "The land purchase in Ecuador let the company be independent from the conjuncture of the banana market in Ecuador", Valeriy Linetskiy, "Sorus" President, says. "The production may increase on 40,000 boxes per week". At the present moment "Sorus" supplies around 25,000 boxes per week.

Andrey Verkholantsev, the expert of "AntantaPioglobal" investment group, observes that the private lands and the effective delivery service are two key factors which influence the level of the profitability on the fruit market. Sergey Filchenkov, the analyst of "Finam" investment company, agrees. "The extension of the own raw material base is an important element for "Sorus" company to decrease the expenses and to increase the cost efficiency", he observes. According to his forecast, "Sorus" has a chance to double its market share in the coming 5 years or to significantly increase the company's presence on the markets of the neighboring countries.

However, "Sorus" competitors don't think so. They agree on the feasibility of the extension of the land assets and the improvement of the transpiration system; but, they see no background for the serious market changes. "The purchase of the plantations is feasible; this step let the company control the purchase price for bananas", Andrey Afanasyev, Commercial Director of JFC group says. Nevertheless, he doubts the correct choice of the cities for "Sorus" to construct the terminals: "Penza and Kostroma have 500,000 and 280,000 of the local population respectively. I can hardly estimate these towns as the large units of the trade routes". Mr. Afanasyev thinks, "Sorus" investments won't result in the significant change of the market shares, if the dynamics of the fruit market is taken into account.