Industry’s key highlights
Agriculture in Belarus is given priority, which is reflected in government policy. Over the past 10 years, the priority has been to ensure food security and the development of animal husbandry (especially the production of meat and milk). Over the past 10 years, the agricultural processing industry has developed significantly..
Over the past 5 years, the gross value added of agriculture in the country's GDP has fluctuated at the level of 8% (in 2017 it was 7.9%). The volume of agricultural production has been about USD 9 bn (+16% in comparison to the previous year). About 15-18% of products are exported in the amount of over USD 2.5 bn annually.
Despite the fact that the industry is mainly represented by large-scale state-owned property complexes (more than 90% of agricultural production), including livestock and crop production, some sectors are distinguished by the presence of large and medium-sized private companies: dairy processing (Savushkin product), meat processing (Servolux, Belatmit, Galerea vkusa, Inkofud), small and medium-sized companies of the agro-industrial complex engaged in the cultivation of vegetable and garden products (Recently, private companies engaged in some sector have diversified their core business by agricultural one: for instance, Conte has its own production of organic agricultural products, Belita has its own orchards).
Competition in the industry is focused on such segment as processing of agricultural products (milk, meat, fruits and vegetables) and has two natures: competition for the resource base, competition for the end user in the country and abroad.
Investments in industry
For the period 2013-2017, the cumulative investment in fixed assets in the industry amounted to USD 8.25 bn (while there is a tendency to decrease the volume, which is associated with a decrease in the financing of state programs: over the past 5 years, funding from the budget has decreased 1.6 times to 5.4% of budget expenditures) - this was reflected in the reduction in the pace of modernization and the creation of a new infrastructure of the raw material base (dairy farms, storage facilities, rooms for cattle keeping, etc.).
Foreign direct investment on a net basis in agriculture (without the agricultural processing sector) is insignificant, only 0.6% of the total volume, and the situation has not changed much over last 5 years. At the same time, in 2017 there was an inflow in amount of USD 7 mn, while in 2016 there was an outflow in amount of USD 7.2 mn. This is due to the organizational specifics of the industry (the dominance of state ownership, private business functions as farms and small agro-industrial complexes).
UNITER’s competence in the industry
The company pays its attention to projects in agriculture, creating the conditions for the successful implementation of greenfields and transactions in this industry.
UNITER team has prepared research and feasibility studies on the creation of the production of potato flakes at own agricultural base for a private Belarusian company and a European equipment manufacturer; a business plan has been developed to create a sheep breeding and fruit/vegetable production complex for private foreign investors.
UNITER Investment Company was one of the first which focus on the prospects of dairy and meat processing in Belarus and actively participated in the implementation of projects: Due Diligence of Berezovsky Cheese-Making Plant for EBRD and the largest milk producer in Lithuania; prepared feasibility study for the project that comprises the construction of a new dairy farm and a cheese production line (total investment of USD 60 mn) for a foreign investor.
DisclaimerThese industry outlooks were prepared for informational purpose only and does not constitute an offer or solicitation of a strategic transaction. Points of view, forecasts and evaluations presented in these outlooks reflect our opinion as of the publication date and may be changed without notice. Although the information contained herein has been obtained from sources we believe to be reliable and although we ensured their accuracy as of the publication date, we cannot guarantee, expressly or impliedly, practicality of these outlooks regarding future events or current or future value evaluation. Any investment decision based on these outlooks should be made only at the discretion of the investor and UNITER or its employees or any third party shall not be responsible in any form and in no circumstances for any action of any party taken on the basis of these outlooks. Nor UNITER, nor any of its employees, nor any third party shall be responsible for losses that result from such actions.