International Sugar Corporation

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Creation within the Territory of the Rostov Region the first joint Russia-France agribusiness holding company

ISC INTERNATIONAL SUGAR CORPORATION CJSC and the leading French and German companies together agreed to join their work efforts and experience for implementation of the construction engineering of the FIRST DONSKOI SUGAR BEET PLANT with 12 000 tons of refinery capacity of sugar beet per day in the Tselinskiy area of the Rostov Region as a part of the accepted by the President and Government of the Russian Federation Doctrine, Programs, Strategies and other regulatory legal enactments.

With the support of the Rostov Region governor and government, Ministry of Agriculture and Food and Municipal District Council and for the first time in the development of sugar beet industry in the Rostov Region, 250 ha of land were allocated to ISC INTERNATIONAL SUGAR CORPORATION CJSC for the construction of the most modern plant in Russia.

Under state private partnership program Municipal District Council of the Rostov Region took all required actions and developed unprecedented supportive measures for the construction of sugar beet plant and creation of the required infrastructure at the expense of the Region.

Following the governor’s resolution, the technical advisory group has been set up chaired by Mr. V.N. Vasilenko, the Vice-governor of the Rostov Region and Minister of Agriculture and Food, to review and approve further urgent solutions for successful implementation of the investment project.

Particularly, the key goal of Ministry of Agriculture and Food is an absolute provision of sugar beet processing plant with raw material and increase of productivity to 1.4 mln. tons up to 2015.

The present program is implemented in accordance with the cl.6 of the Report of proceedings at meeting that was held on 12.02.2013 at Mr. V.N. Vasilenko, the Vice-governor of the Rostov Region and Minister of Agriculture and Food to discuss formulation of proposals in order to increase sugar beet seeding in the areas of the South Zone.

Cultivation of sugar beet in the Rostov Region is sustainable industry. In the last 5 years the areas under crops amount to 15.6 ha, the average gross collection amounts to 563 thousand tons. Therewith it should be noted that cultivated output yield is processed and transported to Krasnodar Territory, on the average for 150 km that considerably lowers profit aspect.

In present time in order to successfully fulfill the Present Program, perspectives of mutually profitable cooperation between sugar beet manufactures and sugar beet processors are elaborated.

In addition, Minister of Agriculture and Food with the support of Municipal District Council is solving the issue of granting to ISC INTERNATIONAL SUGAR CORPORATION CJSC agricultural land with a total area not less than 30 thousand ha in the areas of the South Zone in the year 2013.

As an outlook it is previewed to increase these areas up to 100 thousand ha of agricultural land of high cadastral value.

With the reference to the foregoing it was decided to create within the Territory of the Rostov Region the first joint Russia-France agribusiness holding company for common works on efficient land use for the implementation of the strategic aim to secure an absolute provision of sugar beet for the FIRST DONSKOI SUGAR BEET PLANT with obligatory enhancement of sugar beet quality, reduction of crop ripening terms, storage-life extension and creation of the most modern technology of sugar beet processing.

For the further investigation of this assignment the parties outline the list and naming of the lands that are in their sphere of strategic interests for legal support of land allotment, lease of land parcels meant for areas under crops including participation in the require red meetings.

The key goal of agribusiness holding company establishment shall let to considerably improve sugar beet production and make it the biding element between sugar beet plants and kolkhozes. It shall be the provision of kolkhozes by technical tools either as seeds or chemical products, agricultural equipment and technical service.

In connection therewith, Agribusiness holding company shall draft the schedule of crops acceptance for the areas of South Zone of the Rostov Region as well as conditions of acceptance of product.

Agribusiness holding company shall coincide with the launch of the sugar beet plant in the Tscelinskiy area of Rostov Region other agricultural commodity producers of the South natural-agricultural Zone using available agricultural equipment and additionally expanding its number, shall increase area under sugar beet crops up to 25 thousand ha by 2015 and produce 1 mln. tons of sugar root crops.

For the complete technologic download of the project sugar beet plant it is required to produce 1.2-1.2 mln. tons of sugar beet. In order to find the solution for this important strategic goal in 2016-2017 the agribusiness holding company shall increase areas under sugar beet crops for the production of the commodity volume stated up to maximum 30-35 thousand ha.

It should be appreciated that total acres of the South Zone fields composes more than 1 mln. Ha, and recourses allow to fulfill the present task to the fullest extent.
ISC (CJSC) and Agribusiness holding company shall form bank of financial assets in participation with funds, banks and other financial partners for the elaboration of Business-Plans, lease and purchase of fields, agricultural lands for the implementation of the Program on sugar beet production increase in the Rostov Region.

Considering the large sum for the implementation of the Program on sugar beet production increase, it shall form a separate line. For the implementation of the project in general, a series of negotiations shall be carried out with the partner’s banks, funds and financial partners. In this respect as charging instrument of pledge shall be leased and purchased lands, shares of ISC INTERNATIONAL SUGAR CORPORATION CJSC and agribusiness holding company.