SHORT PRESENTATION OF THE ROSAGRO-PROJECT IN RUSSIA

Create a brand and set up the production of premium agricultural/dairy products for the strongly growing niche of these products in the Russian market on the basis of relevant traditional farming and production know-how from Switzerland and other Western countries. This goal will be reached by the following steps:

Short term: setting up of a pilot farm in the Southwest of Moscow (Kaluga Region) for the production of high-end agricultural products: milk, milk products including cheese), meat and meat products.

Medium term: creating an integrated production chain, including the production of the raw material, their processing (into cheese, yoghurt, health drinks etc. and possibly milk powder) and creating an industrial park for food related production plants.

Long term:  creating own distribution channels and multiply the production set-ups in Russia (around other big cities than Moscow). 


2.  Fundamentals of the Project

Since a few years the Russian retail sector has been growing substantially and it is expected to do so in the future. The same goes for the purchasing power of the population, especially in big cities like Moscow, St. Petersburg etc. According to the latest estimates approximately 20 – 25 % of the overall inhabitants of the Russian Federation belong to the middle class which in 1998 after the financial crisis seemed to have ceased to exist at all.  In cities like Moscow these numbers are higher and reach most probably about 50%. Many of them will soon enter the high-end consumer market and thus become potential customers.

The high-income population we are aiming at has equally grown considerably and represents actually about 3-5 % of the inhabitants of cities like Moscow.

On the other hand the Russian agricultural sector is not in a position to satisfy the ever growing demand of high-end products which is even more fulled by the developing of health consciousness among the wealthy consumers.  Therefore about 70 % of premium milk and meat products are imported, mainly from EU countries. Given the gradual reduction of the former substantial subsidies granted by the EU and the actual increase of the production costs, especially for milk, a growing number of Western entrepreneurs are now intending to put up their own plants in Russia.

The market niche for our products is therefore open and so far hardly occupied by any Russian or foreign producer.


3.  Realization and Time Frame

Phase I:  Pilot project Kaluga farm

Setting-up of a first dairy farm south of the city of Kaluga (approx. 200 km from Moscow) with about 500 cattle on a surface of about 1000 hectares in order to check the production and the market side.

Start of operations summer 2009

Phase II:  Expansion into a full-fledged farm industry

Development of of up to 10 additional farms of similar or bigger    
size in the same geographical area.

To be completed end of 2010

Phase III: Setting-up of an industrial park
 
Building of an industrial park in the Kaluga region facilitating the establishment of food processing plants for Western food producers in Russia using our raw material.

The park will be ready in the second half of 2009

Phase IV: Multiplication of the project in other parts of Russia

Expanding the operation by creating new agricultural production
facilities around Moscow and other Russian cities with a population
of more than l mio. with fast growing purchasing  power.

Starting at the earliest 2010


4.  Pilot Project in the Kaluga Region

The pilot project will provide the possibility to demonstrate and experience the possibility of quality managed farming in the area of Kaluga, about 200 km south of Moscow.

Together with Russian partners and managed by German agriculture specialists RosAgro is setting up an approx. 500 cows dairy and meat farm. The farm will integrate in the overall RosAgro development plan as an example for management, profitability and quality assurance.

5.  Management

Managed by Swiss and Germans on top level, most of the employees will be Russians from the region. Specially educated agricultural engineers will be in charge to grant quality standards and process management. Specialist out of Switzerland, Austria, France and Germany will guarantee the special know-how which is needed to perform highest level and old tradition following production processes, to ensure the outcome of highest quality dairy products.

6.  Finances

The finances for phase I are partly provided by the initial founders of the project and their respective partners, but more funds of approximate 10 million EURO for this phase are still required. The project, RosAgro Finance Ltd., is open for investors, preferable out of the European milk and/or meat processing industry. But also ‘quiet’ capital investors are most welcome to invest in this highly adequate and, in the medium term, very profitable project. As the project is just about to start, discussions with potential investors are still open and preferential positions can still be included. 


7.  Partners 

- CommitAgro (Western consultants with a proven track of experience in the Russian  
  Agrobusiness) 

- Metro International Cash & Carry (Retail in Moscow and other big cities): letter of intent 

- Nestlé Russia (mainly consulting concerning the processing sector of the project): letter of
  intent

8.  Interested and Potential Partners

1. Swiss and German agricultural associations
2. Medium sized meat- and milk-processing firms in Switzerland, Germany, Austria, Italy etc.
3. Strongly developing retail supermarkets in Russia like Auchan, Mosmart, Ramstore, etc.
4. Retail store chains in the premium sector like Fauchon, Hédiard, Sedmoy Kontinent and newly established chains of stores specialized in high-end and bio products.
5. Holder of project: Rosagro Finance Ltd., Zurich, Switzerland
   
6. Investors Opportunity: Investment against Equity

Like to be an investor in this project? Please contact use via this contact page. Thanks.