International Sugar Corporation

Back to “Press Room”

The point of no return has been left behind Press source: Rural Life

Probably no one in the Don region can recall another project that has been slipping out the investors’ hands for about 10-15 years in a row, as the sugar plant construction project has been doing. Naturally there have been various reasons for that, and those desperate enough to run sugar beet cultivation business had no other way but taking the root crop to the neighboring regions hundreds kilometers away for processing.
A real investor appeared only at the turn of the years 2012-2013 in person of INTERNATIONAL SUGAR CORPORATION and French company SUCDEN. Tselina village was chosen to become the project construction site as the most suitable one since sugar beet is largely cultivated around this settlement.
Rostov Region authorities headed by governor Vasily Golubev together with the Ministry of Agriculture and the Tseliners themselves gave the green light to the project. Though, as it has always been and still is in such cases, road-blocks have been long on.
However, in early June all the interested parties had already given their guarantees for the project implementation. The main impulse to that was the document signed by governor Vasily Golubev addressing banks with request for the project financing credits.
In particular, this very fact brought about the current publication. Things are happening, the process is irreversible and the point of no return has been passed. Everybody would love to believe in such outcome, including the investors. General director of “International Sugar Corporation” CJSC Petr Panteleev gave a comprehensive explanation of the business situation at the joint session of urban and municipal districts chamber of “Rostov Region Municipal Entities Council” association, held in the Tselinsky district.
Mr. Panteleev has estimated the work on construction of the first in the Don region sugar plant to be of high value both for increasing the sugar beet production in the Russian south and for the local land resources management. It should be noted, that the company has a rich experience in this field what is of significant importance since the plant is to be put up in course of the national project on agricultural lands prospective development and the State Food Safety Doctrine realization.
Originally the sugar plant was intended to have processing capacity of 10-12 thd. ton of beet, though the mutual understanding achieved and the significant results of the first months may today already enable capacity growth up to 20 000 ton. The investor is also planning to extend the beet processing time period from original 100 to 140 days in order to raise production.
If these plans are executed, the Rostov region first sugar plant will become the flagship of sugar industry in Russia, thinks Petr Panteleev. There is a reasonable chance of success backed by the advantages of the chosen construction site location. The most essential thing is the land availability. There are about 1 mln. hectares of agricultural land that will be a mandatory reserve for the processor. Moreover, the manufacturer will benefit from the beet delivery distance cut short.
The meeting got a comprehensive idea of “International Sugar Corporation” origin as well. Fifteen years ago the company started the Kotchubeevsky sugar plant construction. Dobrinsky plant in the Lipetsk region was next, speaking of which, 1 300 000 ton of sugar beet was processed there last year. The credit for this goes to sister company SUCDEN, as Mr. Panteleev puts it. Having become one of the global leaders in sugar industry in 20 years of doing business in Russia, this company has other two similar enterprises on its account, and up to 100 000 hectares of land available.
The meeting was pleased to know that the companies ISC and SUCDEN had signed an agreement on experimental adoption of new sugar beet cultivation technologies at Kazminsky farm within the Stavropol Territory. When sugar producers got sugar beet cultivation under control, the crop yield reached 800 hwt per hectare. It appears that this experience of the investor might help the Don sugar beet growers. All the more so, as no one else has yet been able to outperform those values.
Still, today the investors' attention is mainly focused on the committed funds application that will go to construction and assembly works, processing equipment installation, social infrastructure development, staff recruitment and training. All of these will take about 10 bln rubles at the outset, yet later the amount is to double.
Mr. Petr Panteleev has as well mentioned that the most modern technologies in sugar beet processing, production capacity and output quality performance are implemented at the sugar plant. Dried pulp is to be processed there as well. Moreover, apart from the beet processing complex, the same Don area will also become a construction site for the export bioethanol production plant that is to be put up in cooperation with French company “Cristal Union”.
Both positive and negative experience in and outside Russia is taken into account in company performance. A careful analysis of the current market situation both in Europe and in Russia has been undertaken. Apart from the ones mentioned above, other four global companies that already have to its credit a number of sophisticated put-in-place sugar plants in Europe. Short-term plans of the Company include holding a tender with the issuance of sugar plant project implementation agreement to follow, and are to be completed in September-October.
The head of “International Sugar Corporation” has particularly noted the gained support of the region administration on the matter of provision of gas, water and power supply as well as access motorways. A few clarifications thereupon were provided by Minister of Agriculture and deputy governor of the Rostov Region Vyacheslav Vasilenko. The matter of renting an access blind street for delivery of equipment to the plant has been ultimately solved with the “Yug Rusy” company management.
Governor Vasily Golubev and leader of GAZPROM Aleksey Miller reached an agreement on reconstruction of the local gas distribution station. Engineering survey is already in process and the question of traffic interchange to the upcoming enterprise is soon to be solved.
‘We already have contractors and the documentation package for them. The work is on fast-forward,’ said Mr. Vasilenko, and he is certain that next year is to see the start of the plant construction itself. The deputy governor also believes that the first beet should be taken over for processing in 2015.
Today this hope is shared by everyone in the Don region. Head of Tselinsky district Boris Golubev believes that his mission is to provide on-site conditions for the project construction. The investor has already registered his ownership to land area of 234 ha. Full-scale pre-construction works are in progress in the areas that used to seem problematic not long ago. The Tseliners rejoice at the planned construction of 50 residential units with social infrastructure facilities. And most importantly, a longed-for pipe network for quality drinking water transmission from Sladkaya Balka water deposit is finally to be installed. It used to be a long-standing problem and its solution means a lot.
Furthermore, the sugar plant will bring along related production enterprises to the area. This fact should provide local budget with additional revenues and increase the employment, what in turn will be a contribution to the national project on rural development.
Mr. Panteleev has mentioned that the sugar beet production question will be of no less interest for the investor. More so, when it comes to better understanding of problems between beet processors and beet growers. This program is to be drawn up and implemented in cooperation with the local growers, and that’s where its main value lies. The plant itself and the primary producers will be interested in close cooperation.
‘Our main objectives are to improve farming standards, introduce new technologies in primary production and raw material processing and increase crop yield capacity through innovation,’ said head of “International Sugar Corporation” CJSC Petr Panteleev. ‘The recent session of National Front, the organization that claims to exist ‘for the sake of Russia’, called for that in particular when addressing the agriculturists.
‘All these shall redefine our legal relationships in financial and economic sector that is of key importance in any cooperation. To make it effective, responsibility, honesty and transparency are necessary on both sides. And this is the kind of cooperation we are ready for’.