Ecocultura to manage Chinese greenhouses

Russian greenhouse producer Ecocultura has agreed to create a 250 ha production unit in China. Chinese state company Huafa Group are going to finance the project. Ecocultura will be managing the operational side of the business, which will allow the holding to study the Chinese market before arranging potential export of Russian produce to China.

Agroindustrial holding Ecocultura has agreed on the greenhouse complex construction, reports the president and co-owner of the holding, Mr. Aleksandr Rudakov. According to him, Huafa Group will take upon themselves the financial side, while Ecocultura will be monitoring the construction and managing further operations. Lipetsk greenhouse construction factory will supply the materials and will become a construction partner. The first phase of the complex of 20 ha in the Guangdong province is expected to be launched by the end of 2019. It is planned to expand the acreage further to 250 ha.

According to Mr. Rudakov, the suggestion for cooperation came from Huafa Group. The most feasible financial conditions of Ecocultura's participation in the project is having a certain percent from the profits, the amount of which will be determined during the negotiations, added Mr. Rudakov. He has not disclosed when the planned greenhouse production capacity will be achieved. Huafa Group has not responded to questions regarding this either.

According to their own data, Ecocultura is managing greenhouse complexes with an overall acreage of 145 ha and production capacity of 100 thousand tons of tomatoes, cucumbers and lettuce a year. By 2023, the greenhouse acreage should reach 580 ha. The main company owners are Mr. Aleksandr Rudakov, Mr. Andrey Petrenko and Ms. Irina Ashinova. The financial information is not disclosed.

Huafa Group are dealing with construction, retail management, investments in production, etc. The company manages the assets in the amount of $20 billion, annual turnover exceeds $7 billion. Huafa Group is owned by the Chinese Committee on State Property Control and Management. The headquarters are located in Zhuhai.

The general director of Tehnologii rosta, Ms. Tamara Reshetnikova, evaluates the expenses on the fourth generation greenhouse construction that Ecocultura normally builds in the amount of €2–2.5 million per ha depending on the presence of supplemental lighting. She also added that the amount of investments could depend on the presence of engineering infrastructure. Thus, the first phase of the greenhouse construction may cost up to €50 million and investments in the whole complex may amount to $625 million. According to Mr. Rudakov, they will produce cucumbers, tomatoes and lettuce. In the beginning the produce will be sold only in the local Chinese market.

According to Ms. Reshetnikova’s calculation, the first phase of the greenhouse will allow for the production of up to 19 thousand tons of tomatoes or 12 thousand tons of cucumbers a year and the whole complex will produce 125 thousand tons and 150 thousand tons accordingly. The produce will be in high demand in the local market, believes Ms. Reshetnikova. According to her, most Chinese vegetables are produced in greenhouses built with temporary wooden constructions, which cannot provide an annual growth cycle and proper quality and safety conditions. Ecocultura could be of interest for the Chinese producers because of their technologies, considers a top manager of a leading greenhouse grower.

For any Russian company such an experience can be useful from the point of understanding the basics of Chinese business peculiarities, interactions with the local authorities and sales arrangements, considers the head of Center for Economic Forecasting of Gazprombank, Ms. Darya Snitko. According to her, such experience can be valuable for Ecocultura in arranging own produce export from Russia to China.


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