Rusagro Group, Russia's largest Agro-industrial company, will invest up to $100 million in the next three years to boost output at four of its seven sugar plants by at least 50 percent, a senior company official said.
Rusagro, which produces every eighth spoonful of sugar taken in the world's largest consuming country, is also looking to acquire new assets in Russia, said Alexia Knyazev, general director of the company's sugar division, Rusagro-Skater.
"Our basic target is to increase sugar production from Russian sugar beet," Knyazev told Reuters in an interview. "The preliminary projects are ready. Now we are just working out the details," he said late on Thursday.
Russia produces only about 40 percent of the sugar it consumes and is the world's biggest importer. Analysts have identified sugar beet production as a potential growth industry as the country attempts to reduce its dependence on imports.
World raw sugar prices hit a 25-year peak last month as top grower Brazil uses more cane in the biofuel ethanol, and Russian statistics agency Rosstat said a 30 percent rise in domestic prices last month contributed to higher-than-expected inflation.
Knyazev said Rusagro-Skater would invest between $20 million and $25 million each in four plants south of Moscow Volokonovsky and Valuikisakhar in Belgrade region and Znamensky and Zherdevsky in Tambour region.
"Their capacities will grow on average by one-and-a-half to two times," he said. "From processing 3,500 to 4,500 tonnes a day of sugar beet they will be able to produce from 6,000 to 8,000," he said.
Knyazev said Rusagro-Skater was looking at acquiring other assets, but he did not name any possible targets.
"We are not rushing, because we don't want to acquire bad factories," he said. "For the moment, our valuation of the good factories differs from the price being asked by the current owners, so they simply won't sell," he added.
"But consolidation is inevitable." Rusagro-Skater competes with sugar companies like Prodimex Group and Razgulay, which last week launched its shares on Russia's RTS and MICEX exchanges.
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