Cargill to invest $1.5 bln in Russia in next 5 yrs

ST. PETERSBURG. June 7 (Interfax) - Cargill, the U.S. agri-food giant, plans to invest more than $1.5 billion in its Russian assets in the next five years.

The Russian government's latest initiatives to curb rising food prices will not hinder these investments, Cargill chairman Greg Page said Friday.

Cargill has invested about $1.5 billion in Russia in the last 5-7 years and, considering the country's potential and the Russian government's efforts to sharply increase grain production, the company thinks it would be reasonable to invest about the same amount in the next five years, Page said.

He said the company does not intend to acquire existing assets in Russia, but build new ones. There are plans to open a new production facility in the Tula region.

Asked about curbs on food price increases that the government imposed at the beginning of the year, Page said that any restrictions are unpleasant for business, but thankfully Russia did not restrict grain exports, which was appreciated. Other countries imposed tough restrictions on grain exports during this period, causing a major imbalance on the world market, he said.

Global price increases for food goods will force the governments of various countries to take protective measures, but in Russia's case these measures did not have any impact on Cargill's investment decisions, Page said.

He said world grain prices will continue to trend upward for a fairly long time, but all the countries in the former Soviet Union have strong potential to increase production.

Cargill first opened an office in Russia in 1991, and in 1995 it acquired the Yefremov glucose and treacle plant. In recent years, the company has developed an industrial complex in Yefremov and invested in the construction of a malt house, a plant to produce starch products and treacle, and a vegetable oil refining plant.

Cargill and its joint ventures own 75 elevators in Russia, Kazakhstan, Ukraine, Romania and Hungary, with combined capacity for about 2 million tonnes of grain.