Rusagro to invest up to 10 bln rubles in business in 2012
MOSCOW. April 28 (Interfax) - Rusagro, a major Russian agribusiness group, plans to invest 9 billion-10 billion rubles in its business in 2012, company chief executive Maxim Basov said in a conference call on Friday.
Most of this investment - 6 billion rubles - will be channelled into the development of Rusagro's meat business. This amount does not include spending on construction of a facility to produce pork in the Tambov Region and a suspended project in Chelyabinsk Region, Basov said.
He said pork prices are very high right now as demand has grown more than expected and a number of production projects have not come on line.
Pork prices rose to 75.86 rubles per kg in 2011 from 67.77 rubles in 2010, Rusagro said in a press release on its financial results for last year.
The price is now at 84-85 rubles per kg, Basov said on Friday.
However, Russia's accession to the World Trade Organization in the second half of 2012 will have a negative impact on pork prices, he said. After Russia joins the WTO, the import duty on pork within the quota will drop to zero, and the duty on imports of live pigs will drop to 5% from 40%.
Basov forecast that pork prices in Russia will drop after WTO accession, but that they will not fall below 70 rubles per kg. If there will be unrestricted imports of live pigs, prices will drop to 60 rubles per kg, he reckons.
Rusagro's meat division increased revenue by 18% to 5.41 billion rubles in 2011. Gross profit edged up 1% to 1.926 billion rubles, EBITDA increased by 19% to 2.309 billion, and the EBITDA margin rose to 43% from 42% a year earlier.
The company increased sales of formula feed to 58,000 tonnes in 2011 from 43,000 tonnes in 2010. Pork sales were flat at 62,500 tonnes compared to 62,400 tonnes in 2010.
