May 19 2008, 14:30

Leningradskaya region: the local leader of cucumber and tomato production may stop operating in a year

Agri-firm "Vyborzhets", the largest producer of fresh vegetables in the region, may sell a part of its lands in the nearest future, the administration of Vsevolzhskiy district informed "Kommersant". This will be the second deal of the similar type in the recent half a year. Right now the management of "Vyborzhets" firm is making no comments regarding the present-day situation. At the same time, the enterprises-competitors share plans to occupy the niche which is likely to be vacant in case of the closure of the agri-firm. This firm supplies to around 50% of the regional and city markets of the local fresh vegetables and fresh herbs. The developers point out the high demand for the land, located close to Ring Road; they estimate the value of the land plot, where "Vyborzhets" is located, to reach $150 mln.

Inga Sergeyeva, the Press Secretary of Vsevolzhskiy Municipal community, told "Kommersant" that the management of the Closed JSC "Agri-firm "Vyborzhets" is intended to sell the land plots. She tells about a significant part of the fields where the plant production is unfeasible, to the opinion of the agri-firm specialists. The administration of the district thinks that the land will be sold for the infrastructure location along the Ring Road or for the construction of the residential settlements there. Nikolay Kuritsyn, the General Director of "Vyborzhets", and Alexander Zaklepkin, the major co-owner of the company, made no comments. Answering to the question whether the firm is going to sell the land plots, Vasiliy Fedorov, Deputy General Director of the agri-firm, told equivocally: "I know nothing about the sales, you'd better contact the General Director and the owner. We are not going to close the greenhouses. We purchased a new film for the greenhouses enough to operate during the next three years…do you think we might need this, if we were not going to work further?!"

Lyubov Zlobina, the Chief of the Agricultural Department of the Municipal Community informed that the negotiations were carried out past year about the transfer of a part of "Vyborzhets" production assets from the territory of Vsevolzhskiy district to Vyborgskiy district. Another enterprise of the owners of "Vyborzhets" - Closed JSC "Agri-firm "Karelskiy" - is located there. The administration of Leningradskaya region specified that the negotiations took place in 2007 when "Vyborzhets" was selling the previous land plot. Anatoliy Gusev, the General Director of the Closed JSC "Karelskiy" is hearing for the first time about the possibility of the moving of "Vyborzhets" to the neighborhood of his farm.

Closed JSC "Vyborzhets" and Closed JSC "Karelskiy" belong to the industrial group "Soyuz", which profile business is the manufacture of the construction materials. Alexander Zaklepkin, the member of the Board of Directors of the industrial group, owns the control stakes of "Karelskiy" and "Vyborzhets" agri-firms.

According to the data of the Administration of Leningradskaya region, all greenhouses of the region grow around 14,000 tons of vegetables per year. The largest enterprises are Closed JSC "Agri-firm "Vyborzhets" (7,000 tons/year), Closed JSC "Karelskiy" (2,000 tons/year), Closed JSC "Rosa" (2,000 tons/year), Closed JSC "Vesna-Tikhvin" (2,200 tons/year), Closed JSC "Raduga" (1,500 tons/year).

The market players have been already making plans to occupy the vacant market segment. According to Ivan Kurbatov, the General Director of Closed JSC "Agri-firm "Rosa", Saint-Petersburg market of fresh vegetables has been already opened for the new players and for the expansion of the old ones. "The firm "Leto" has been destroyed, "Vyborzhets" is getting ready to close its business - so, the market is opened", Mr. Kurbatov thinks. The agri-firm plans to extend the production twofold by means of the allocation of 10 ha of land, half of which will be used for the construction of the new greenhouses. The company will have to spend RUR 450 mln. of the credit funds; Dutch specialists will be involved in the construction process. The farm has been already producing more than 2,000 tons of vegetables annually: around 1,000 tons of cucumbers, 800 tons of tomatoes, 400 tons of egg-plants and capsicum, and also more than 2,000 of lettuce pots. Mr. Kurbatov says, the annual profit of the enterprise amounts to RUR 120 mln. ($ 5 mln.).

Not only "Rosa" firm would like to occupy "Vyborzhets" place. According to Andrey Korovkin, the Deputy General Director of LLC "Agro-soyuz", this company also plans to extend the acreage of the greenhouses after the champignon production facilities are launched this summer. "As far as I know, "Vyborzhets" will cease the activities in two years; of course, we will have additional advantages. But, right now we are launching the champignon production - we will supply up to 700 tons per year to the retail chains. We would like to occupy the whole market with "Prinevskiy" enterprise. This market was 100% imported products in the end of the past year until "Prinevskiy" launched the champignon production (1,200 tons per year)", Mr. Korovkin told "Kommersant".

To the opinion of Alexander Kurtov, the General Director of Closed JSC "Raduga" (around 1,500 tons of products per year), there have been the rumors about "Vyborzhets" sale for a long time ago. However, the enterprise will work for at least one year more, according to his information. But, the closure of "Vyborzhets" will hardly have a great impact for the local producers because of the non-controlled inflow of the imported products. "Leto" enterprise, the largest competitor in this business (the firm used to grow products on 54 ha), has already gone - and, the demand for our vegetables was not increased, the shortage was just replaced with the imported vegetables. The increased import tariff rates for vegetables have entered into force since April the 15th; right now the custom expenses per one kilo of cucumbers amount to RUR 25; and, the purchase price for cucumber is RUR 20 on the small wholesale base. So, either someone is working at loss, or the products avoid the custom clearance", Mr. Kurtov believes. To the opinion of the Manager of "Raduga", the share of the locally grown products is not more than 10% on the vegetable market of the city. The Director of "Rosa" farm estimates that this share is around 15-20%.

According to evaluations of the specialists of consulting company Colliers International, the land plot of "Vyborzhets" is conveniently located for the logistics complex construction - it is close to the city and to the Ring Road and Moscow road. The land may cost around $15-20 per square meter there.

"The local land meets good demand; it is used for the various purposes - to locate the production-warehouse facilities, to construct residential settlements. There are almost no large free areas left. The price for the land plot depends on the location, access routes and the available infrastructure. It may reach $130-150 per square meter", Yuri Zaretskiy, the General Director of "Peterland" consulting company thinks.