Research Notes

Razgulyai is one of Russia's largest agricultural holdings. The company's strategy to upgrade existing capacities and develop in-house projects to grow rice and beets should allow Razgulyai to strengthen its positions on key markets, boost sales and improve margins.

• The Razgulyai Group engages in storage of grain and production of flour, cereals and sugar. The company represents a large vertically integrated agricultural holding that merges two sub-holdings – grain and sugar. The group consists of 25 concerns.
• The company's total annual grain storage and transshipment capacity exceeds 1.9 mln tons, which makes Razgulyai one of the largest players on the grain market and also enables the company to generate additional profits from third-party grain storage.
• The company's development strategy aims to considerably strengthen Razgulyai's positions on the cereals market, primarily rice. Since 2004, the company has been implementing the Kubanris project which should help it turn into the largest rice producer in the country and significantly undermine the positions of foreign companies. In 2006, the company acquired Slavyansk Bakery which enabled it to ramp up rice production capacity by over 70%.
• Another strategic segment is development of the sugar sub-holding, in particular, higher beet sugar production. The company plans to independently grow beets which should ensure capacity utilization for sugar plants and cut costs. In addition, this measure will make it possible to offset risks of beet price fluctuations.

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Olga Samarets

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