December 1, 2011

To set a model for improvements in grain shipments for exports, a joint venture between Russia's main agricultural commodities carrier by rail, Rusagrotrans and United Grain Co will be created, the companies said on Wednesday (Nov 30).

Russian grain exports, seen at a maximum of 25 million tonnes this year, are capped by port capacity constraints, but a Rusagrotrans official said those limitations could be eased if inland bottlenecks were cleared.

Underdeveloped Russian export infrastructure and lack of coordination between exporters, producers, carriers and port officials, have resulted in delays in grain deliveries, or overloads at ports.

"This does not mean that we plan to merge all our assets," Igor Rogachov, first deputy CEO of Rusagrotrans, a unit of state monopoly Russian Railways, told a conference of grain growers, traders and analysts.

He said that Rusagrotrans will contribute 1,000 railcars to the project out of the 30,000 it operates.

Aram Gukasian, deputy CEO of UGC, said that the company will contribute six grain elevators in the centre and in the south of Russia, where the country's main export outlets are located, including a UGC-controlled terminal in Novorossiisk.

The third participant in the venture is privately owned Russian Trinfiko investment fund, Rogachov said.

He said the Rusagrotrans and UGC each will own 25% plus one share in the venture, preliminarily named Grain Transportation Co, and Trinfico 50 minus two shares.

Rogachov said it expects the venture to start operations next year, as its creation has to be approved by the country's anti-monopoly body and then by the government.