IKAR in Mass and Industry Media

Sugar Mills on Sale at Large

Kommersant

Russia’s sugar giant Prodimex has announced assets’ divestiture. Timashevsky Sugar Mill, the Samara Region, is its second enterprise offered to the buyers with six or seven mills to follow in the near term. The analysts attribute the sale to the general sentiment in the industry. Following CIS dumping, sugar production is no longer profitable in Russia.

Prodimex accounts for 16.5 percent of the national sugar market, according to IKAR estimates. It owns 21 mills; aggregate turnover stands at $500 million.

Overall capacity of sugar market in Russia is between 5.7 million tons and 5.8 million tons on year, i.e. roughly $3 billion in terms of money. Import of raw sugar is governed by the floating duty calculated once in three months with regard to the NYSE prices. Apart from Prodimex, sugar giants are Rusagro (12.3 percent), Razguly-Ukros (10.5 percent) and some other companies.

Prodimex announced August 17 it intends to sell Timashevsky Sugar Mill. It is the second asset of Prodimex officially offered to buyers. Ramonsky Sugar, the Voronezh Region, was put up for sale in spring. Actually, the company intends to leave no more than 14 or 15 enterprises, said Prodimex CEO Igor Khudokormov. The analysts forecast Prodimex may count on getting $20 million and $17 million at the most for Samara and Voronezh enterprises respectively. The funds will go to upgrade the remaining assets, the company's representatives promised.

The market bellwethers see this move of Prodimex quite logical and in line with the general trend, blaming it on weak policy of the Cabinet in respect of the sugar import. “Russia had scarcely abolished customs duties on sugar import from the neighboring states, when our market was cluttered up with product from Belarus, Kazakhstan, Kyrgyzstan and Azerbaijan,” said Andrey Chernyshev, head of the Sugar Producers Union.

23.08.05

All viewing: 121
Discuss