April 3, 2009
CHS may expand into Russian grain market
International agribusiness CHS Inc. may move into Russia's grain market as it is looking to secure assets in the Federation, according to market sources.
CHS is negotiating to buy some assets from the Agrico holding company, particularly Agromarket Trade, which was Russia's second largest grain exporter in 2008, sources said.
A source close to Agromarket Trade claimed that CHS will get Agromarket's main assets - offices in Russia and Switzerland with a team of traders, and a regional network for transporting and reloading grain, including facilities in Krasnodar, Stavropol and Novorossiisk.
CHS may also get access to grain storage facilities and the Agrico holding company's land bank, which spreads over 100,000 hectares in the Krasnodar and Stavropol territories.
The cost of maintaining an office and a trader team could be US$3-5 million a year, and much higher if the deal involves land and elevators, according to a source at a Western company that exports grain from Russia.
The world's leading international grain traders - Glencore, Cargill, Bunge, Louis Dreyfus - already have offices in Russia.
