Departure of foreign investors from Russian agricultural market will continue through Q1 2024; deal with Danone is possible - analyst
MOSCOW. Dec 8 (Interfax) - The withdrawal of foreign investors from Russia's agro-industrial market, which started in 2022, continued this year and will continue until Q1 next year, the Finam Financial Group forecasts. Analysts do not rule out a deal for Danone.
"One of the key trends in 2023 is the continued withdrawal of foreign partners from unfriendly countries and the still very timid attempts of our partners from the Middle East and China to enter the market. We expect that the trend of foreign investors leaving our market will continue until Q1 2023. "One of the biggest and most anticipated transactions is the departure of Danone," Alexei Kurasov, head of the corporate finance department at Finam Financial Group, said at the Agroholdings of Russia 2023 conference on Friday in Moscow. The conference was organized by Agroinvestor magazine.
"Danone may agree to a discounted deal this year or next," Kurasov said.
As reported, on July 16, Russian President Vladimir Putin signed a decree on the transfer of Danone's Russian business, Danone Russia JSC, to the temporary management of the Federal Property Management Agency. 83,292.493,000 shares of Produits Laitiers Frais Est Europe and 85,000 shares in Danone Trade were transferred under management. The then deputy chairman of the government of the Chechen Republic, Minister of Agriculture, Yakub Zakriev, was appointed general director of the company. He succeeds Charlie Cappetti, who had been CEO since April 2017.
The company was renamed H&N.
One of the trends in the coming years will be the emergence of new institutional investors from China and the Middle East on the market, Kurasov said. "We don't expect a large influx yet, as they are still only looking at our market. But in the future, in 2025-2026, institutional investors from China and the Middle East will play a key role in our stock market," he said.
Meanwhile, there is currently "a focus on the East, on the development of the Far Eastern agro-industrial complex," where investors are primarily interested in the fishing industry and livestock farming, he said.
Kurasov also said that investments in the agricultural sector this year are estimated at $2.5 billion. The main areas will be investments in the land bank, processing and logistics. Regarding the latter, he stated that there is a great demand for elevators and river-sea vessels. "Every agricultural company that comes to us to raise capital wants to build its own small river-sea fleet for grain export. This is a very marginal business that is in very high demand," he said.