One of the world’s largest agricultural commodity traders, American Bunge has found a buyer for the latest asset in Russia. The company has agreed to sell an oil plant in the Voronezh region to Karen Vanetsyan, the main owner of ExOil Group. Among the co-owners of the holding companies is the former Russian ambassador to Ukraine and former health minister Mikhail Zurabov. The deal could allow the buyer to reduce dependence on the export market.
American Bunge has agreed to sell its Russian oilseed processing business, including a plant in the Voronezh region, to Karen Vanetsyan, the main owner of the ExOil Group holding company. About this Bunge reported Monday 19 September. The conclusion of the deal is conditional and subject to regulatory approval, Bunge said. ExOil Group did not provide operational comment.
Bunge, along with Cargill, ADM and Louis Dreyfus, is one of the four largest agricultural commodity traders in the world known as ABCD. Operates in Russia since 2004, managed by Bunge CIS LLC. The oil extraction plant in the Voronezh region was started in 2008. The investments in the project were estimated at 130 million dollars. The capacity of the plant is 540,000 tons of raw materials, which allows it to produce over 200 millions of bottles of sunflower oil per year. The brand portfolio includes the Oleina and Ideal brands. In 2020, Bunge CIS occupied 10.3% of the Russian bottled sunflower oil market, according to the company’s website.
ExOil Group is engaged in the processing and trading of oilseeds and cereals, port transshipment and logistics. It includes an oil plant in the Lipetsk region with a capacity of over 900 tons of oil per day. According to the Unified Register of Legal Entities, Mikhail Zurabov, former head of the Ministry of Health of the Russian Federation and former Ambassador of the Russian Federation to Ukraine, owns 25% each of Chernozemye LLC and Chernozemye Trading House LLC.
Greg Heckman, CEO of Bunge, quoted in the Bunge report, noted that Karen Vanetsyan has more than 25 years of experience in processing agricultural products, thanks to which the Bunge CIS team can continue to successfully serve customers. Karen Vanetsyan, in particular, owned assets in Ukraine. In 2012, he and his partners sold the Peresechansky oil extraction plant in the Kharkiv region to Swiss Glencore.
Other players have also shown interest in Bunge’s Russian business, industry sources told Kommersant. Director General of the Institute for Agricultural Market Studies Dmitry Rylko notes that the business is distinguished by good condition, optimal location and a portfolio of relatively well-known brands.
According to an industry source Kommersant, ExOil Group was primarily engaged in the export of oil and may be one of the companies most affected by the introduction of export restrictions on this product. And the purchase of Bunge CIS allows you to enter the local bottled oil market, Rylko points out.
The oilseed processing business is Bunge’s last resort in Russia. Former American company sold Rostov grain terminal with a capacity of 700 thousand tons per year at the structure of the former top managers of the United Grain Company Marat Shaidaev and Alexei Chemerichko, who are developing their grain trading business.
–
