7 Sep 2017 09:39

South Korean investors eyeing agri-logistics hub project in Primorye - minister

MOSCOW. Sept 7 (Interfax) - Investors from South Korea are showing interest in building an agricultural logistics hub in Primorye, in Russia's Far East, Agriculture Minister Alexander Tkachev said.

"Foremost, we expect that they will come into the agri-logistics hub that will be here in Primorye. They have a desire, because in the past seven-eight years they have created very substantial infrastructure onshore and it is bearing very substantial fruit for them," Tkachev said on TV channel Rossiya 24.

"Just now bilateral negotiations were held with the Korean side, the president of Korea, the president of Russia, a fairly large business delegation and the governments of the two countries. I myself felt South Korea's intention to have an active presence here, in the Far East," Tkachev said.

The agri-logistics hub is expected to have the largest refrigerated warehouse complex in the Far East, with capacity for 70,000 tonnes, and a container terminal with access to port and railway infrastructure. The first phase of the project is scheduled to be carried out in 2018-2019.

This project was first announced at a meeting of the presidium of the Russian president's council on strategic development and priority projects in May 2017. Tkachev said in an interview with Interfax in June that investment in the hub would total at least 10 billion rubles. The project is expected to be carried out on the basis of a public-private partnership.

In general, investor interest in Russia's Far East is growing, Tkachev said. Agreements for about 40 new investment projects in the agribusiness sector, worth a total of about 200 billion rubles, were made at the Eastern Economic Forum (EEF), he said.

"First of all, I want to note the company Rusagro. It's been here for years already and is not only engaged in building pig farms, but is also actively engaged in dairy, both in Primorye and Khabarovsk Territory," Tkachev said.

Vietnam's True Milk will not only develop projects in Moscow and Kaluga regions, but also in the Far East, the minister said. "An agreement to build a fairly substantial dairy cluster was also signed with them," Tkachev said.

Sodruzhestvo is carrying out a project in the region to grow and process soybeans.

"In other words, fairly substantial assets, serious investors are coming here. I'm not even talking about the average and above average assets and investors, who number in the dozens," Tkachev said.

The payback period of projects in the region has decreased to five-seven years thanks to measures of state support, which has made the Far East more attractive for investors, he said.

"There was never such a figure, projects always reached breakeven in ten years [...] We are seeing that investors from other regions are also coming. Therefore, I think that in five years we won't recognize the Far East. It will not only feed itself, with meat, milk, fruit and vegetables, but will also export. And many projects here are already oriented toward export markets," Tkachev said.

"I'm absolutely sure of this," Tkachev said when asked if the Far East will be able to independently supply itself with food in future.

"Of course, in different districts the situation is shaping up differently and here, in the Far East, it is perhaps the most critical," he said. The region's self-sufficiency is currently 45% for milk, 20% for fruit, 35% for meat and 30% for vegetables, the minister said.

"In order to supply ourselves with meat, we need to create capacity of about 250,000 tonnes, these are fairly substantial amounts. As for vegetables, we must build greenhouses here with an area of about 100 hectares. There is a federal program for this, there are regional programs to support businesses," Tkachev said. The main objective is for the region to feed itself, and surplus food goods will be exported, he said.