Asian businesses plan to invest around $4 billion in milk and dairy production in Russia, helping Moscow replace imports hit by trade sanctions on traditional suppliers.
Russia banned many Western food imports, including dairy, in 2014 in retaliation for sanctions over Ukraine, creating supply shortfalls and spurring investments in its agricultural sector.
Vietnamese dairy producer TH Group began building milk farms in the Moscow region on Wednesday as part of a 10-year project worth $2.7 billion.
Separately, the state-backed Russia Direct Investment Fund (RDIF) announced plans on Wednesday to sign an agreement with Thailand’s Charoen Pokphand Group (CP Group) on joint investments in the construction of a $1 billion milk and dairy complex in the Ryazan region of Russia.
«It’s not the easiest time for our country. We live in conditions of food sanctions and when the Vietnamese government supports us, it means a lot to us,» Alexander Tkachev, Russian agriculture minister, said at a ceremony marking the start of construction of TH Group’s farms.
The first stage, worth $500 million, will lead to the production of 800 tonnes of milk and products a day that are expected to reach the Russian market next year, said TH Group Chairman Thai Huong.
CP Group and RDIF did not immediately provide details of their project. (Reporting by Olga Popova, Polina Devitt, Oksana Kobzeva; writing by Maria Kiselyova; editing by Adrian Croft)