(1888PressRelease)
August 26, 2008 - OJSC PAVA announces its plans to set up the company’s own division for agricultural production following the strategy of creating a vertically integrated business structure and becoming the leading Russian agro-industrial holding company. The activities of the division include acquisition and cultivation of land assets in different parts of Russia, characterized by high yields.
The company focuses on high margin crops; the majority of wheat grain will be used as raw materials supply for PAVA’s own production. During 2 years, before the new advanced processing plant will start operations, wheat will be used for flour-making at the company’s current facilities, which is very relevant while PAVA is actively expanding overseas markets. Products of the deep processing project are intended for sale both in Russia and abroad. The rest of wheat grain and crops other than wheat will be traded on both domestic and foreign markets.
Russian agricultural market, and especially its grain production segment, has a significant unlocked potential, and offers substantial opportunities, taking into account the growing demand on the world food and feed markets. The competitive development, however, is not possible without using up-to-date technological advancements. Therefore, PAVA intends to base the project implementation on the best agronomic practices uniting European techniques and inner knowledge of the local conditions. The company is currently investing in modern machinery and equipment, training of local staff, thorough analysis of soils. Some of the strengths of this project which help PAVA achieve its strategic goal include the team of professional employees with relevant experience and industry know-how, and geographically diversified portfolios of both land and crops to minimize risks. Introduction of the new grain growing business unit means that PAVA will be able to control the full production cycle which is a step to vertical integration and becoming the leading agro-industrial holding company in Russia.
At present, PAVA controls 60 000 ha of land.
Information about the company: OJSC PAVA is known as one of the three leading operators on the Russian grain processing market. Its principal activities are manufacturing and distribution of such products as flour of different grades, cereals, confectionery and animal feed. The brand names of the company’s products include PAVA, Altay-Batyushka and Zhitnitsa.
At present, PAVA Group consists of 3 flour mills, a grain-processing enterprise, a grain-trading company Transagro and a subsidiary for confectionery production. PAVA products sell in 68 regions of Russia, and in 2006, when a decision to strengthen the international line of business was made, the company started exporting to foreign markets and the CIS markets. So far, the company’s performance has been successful and following the results of 2007, it was awarded by the Russian Ministry of Economic Development and Trade as the Best Exporter of the Industry. For more than 2 years PAVA has collaborated with the United Nations within the line of World Food Programme, supplying vitamin-enriched flour to developing countries.
###
