Dreyfus, Sistema to form Russian farm venture: repot
Gerard Louis-Dreyfus, former president of the eponymous investment group, has created a joint venture with Russian group Sistema to invest in Russian farmland, a press report said Wednesday.
The new company, RZ Agro Holding "already controls 90,000 hectares (220,000 acres) on five farms in the Rostov region of southern Russia," and seeks a total of 150,000 to 250,000 hectares, the economic daily Les Echos reported.
The new company wants to "take advantage of consolidation opportunities and privatisations in the sector, in particular for the best cereal-producing croplands, which are estimated at 13 million hectares," it added.
Global demand for cereals is rising and Russia can offer ample land and low production costs, but investors should also be prepared for "serious judicial and bureaucratic processes," the newspaper cautioned.
Dreyfus and his nephew Peter Mann, who will also own part of RZ Agro Holding, already control some Russian land via a company named RZ Agro they formed in 2009.
The new holding group is expected to combine "the savoir faire" of the Louis-Dreyfus family with Sistema's reputation for doing business in Russia.
"Sistema will allow us to continue our expansion," the newspaper quoted RZ Agro executive Stephane McFarlane as saying.
"On its own, a foreign investor cannot expand in a sustained way in this strategic sector," he explained.
© 2012 AFP