Pork investment chances in Eastern Europe
There are plenty of investment opportunities in
Russia, Ukraine, Romania and Hungary in all parts of the pork supply chain
concludes a new report from the Dutch Agricultural Economic Institute
There is still a lot of progress to be made in these countries in the field
of management, knowledge and knowledge intensive products, such as premixes,
breeding stock, housing technology and underlying knowledge.
conducted a study in Russia, Ukraine, Romania and Hungary on behalf of the Dutch
Ministry of Agriculture and with support from feed maker Cehave
Cehave Landbouwbelang is already active in these
countries and intends to expand its foreign business. "Now we achieve about one
third of our turnover in foreign countries," said CEO Kees Sijssens. "For 2010
we aim at 45%".
Opportunities in Romania
production of compound feed for pigs in Romania amounts to 0.7 million tonnes.
The rest of the feed needed is produced on-farm in some cases supplemented with
concentrates and premixes.
Concentrates and premixes are imported, as is
soy. Romania is self-sufficient for wheat, maize and sunflowers. There appears
to be a scope for investors in the feed industry for supplying large farms with
high quality complete feed.
If use can be made of an existing
distribution structure, feed can also be supplied to backyard farmers, which
take the majority of Romanian pig farming business.
Ukrainian agriculture has great potential for
cultivating raw materials. Livestock population is growing, as is the demand for
In 2005 some 2.8 million tonnes of compound feed were
produced, of which 0.6 million tonnes only for pigs.
Investors in modern
feed technology can supply to agro-industrial complexes that lack the required
The use of complete feed is not customary on
smaller farms. Some of these farms however do use premixes and
Russia most doubtful
single parts of the supply chain may involve major risks. In Russia, there is a
precondition that a complete chain be set up for breeding stock and own feed
production up to and including meat processing.
to Russia is the fact that investment is only possible when done jointly with
local investors. Opportunities must actually be sought in supplying through
In the other countries investigated it is possible to
set up a business of your own, but beware of ownership of properties, which is
not always clear.
Use existing businesses
In view of
lengthy permit procedures for setting up completely new business, it is
recommended that existing businesses (e.g. former state-owned properties or
farms) are taken as the basis and modernised.
This also provides the
opportunity to explore the local market and to create support among the local
Investment in a partial interest in existing businesses is
recommended, certainly when entering unfamiliar markets. Partial investments
limit risks and provides access to local networks.
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