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Investment project to construct milk farms in Russia
2010-01-02
Brief:A Russian company that has made a success in this field invites interested investors & farmers to construct a farming system consisting of 50 dairy farms in the Samara region of Russia. All farms will work on their own balance sheet.

A Russian company that has made a success in this field invites interested investors & farmers to construct a farming system consisting of 50 dairy farms in the Samara region of Russia. All farms will work on their own balance sheet.

Each farm will have 1000 ha of land, 500 cows, 1000 calves, and the following structures (cow shed–4808sq. metres, calve shed –1620sq. metres and fattening areas –14160sq. metres), milking parlor and a house for the farmer.

Each year farm will produce 2 200 tons of milk (using milk yield 4 500 liters of milk from one cow), 450 calves of which 225 heifers and 225 bulls that will be kept for 18 months.

Production of beef will be 122.2 tons and 225 heifers of which 137 will be sold and 88 heifers kept as replacements.
There will be perennial grasses sawed on the farm under irrigation, organization of pastures for the summer period and preparation of silage in rolls for the winter.

Cost of one farm on a 'turn-key' basis is 2.78 million Euros, including:
·500 heifers costing 0.92 million Euros;
·land costing 0.08 million Euros;
·agricultural machinery and equipment costing 0.52 million Eeuros;
·buildings and structures costing.1.2 million Euros;
·preparation of pastures costing 0.06 million Euros.

The Farm's owners, paying in equal shares, will organize a Cooperative and build:
·a milk plant costing 5 million Euros;
·a slaughterhouse costing 2 million Euros;
·one hundred and fifty shops costing 6 million Euros;

The Milk plant will organize the following:
- technical service for maintaining the equipment, machinery and supply spare parts;
- shop to sell materials and inventory;
- records of productivity and gene pool of cows;
- supply of bull’s semen and control of in-calf cows.
 

To construct a farming system to produce 110000 tons of milk, 6100 tons of meat and 7000 heifers per year

 

The total cost of the project is 152 million Euros.

At the moment the project implementation is going through the stage of attracting necessary investments; the following work has already been done:
- preparation of a business plan;
- the main idea has been formulated, the development stages have been determined;
- the investment costs have been calculated;
- an evaluation of the project's commercial effectiveness has been carried out.

Since each farm works on its own balance sheet and appears to be an owner of the whole technological chain (land-farm-processing-shop), all profits stay on the farm.

Resultant financial and economic indexes of the project–profitability, recoupment, net current cost and others – characterize it as attractive for direct investment as well as for financial institutions. Internal rate of return as a measure of profitability is 26.1%.

The Farm's owner is the owner of the whole technological chain from land to store that maximizes received profits.

The initiator of this investment project invites interested Russian and foreign farmers and investors to participate in this project by buying a "participant package".

The cost of one "participant package" is 3.04 million Euros.

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