The Russian market of greenhouse vegetables is on the verge of consolidation, due to the recently announced plans of Rost Group of Companies, one of the country’s leading producers of greenhouse vegetables, to acquire its major rival the local Valley of Vegetables Group.
Valley of Vegetables currently remains a large producer of cucumbers, tomatoes, eggplants and greens under the brand of the same name, as well as strawberries under the Vybery Menya brand. The total area of greenhouses under its operation is 195 hectares, of which 182 hectares are operating greenhouses. The company had previously announced its plans to complete the construction of the remaining 13 hectares by the end of 2020. As for Rost Group, the company already has four operating and two greenhouse complexes under construction, which are located on more than 193 hectares. The company has plans to complete the construction of another 100 hectares in the short term. The company specializes in the production of branded greenhouse vegetables, which are positioned both for the middle price (Rost, Lukhovitsky Vegetables) and premium segments of the market (Dolce Vita, Flamenco, Honey Tomatoes, etc.). The deal will allow Rost to expand the total area of its greenhouses up to 388 hectares and to increase its total production up to 320,000 tonnes of tomatoes, cucumbers, salads and berries annually. According to Mikhail Glushkov, director of the National Fruit and Vegetable Union of Russia, a public association that unites some leading Russian fruits and vegetables producers, as a result of the deal, the Rost Group will become the leader in the domestic market of greenhouse vegetables and one of the leading players in the world.
Yegor Shumilin, director of the department of category management of fresh goods at Magnit, one of Russia’s leading food chains, considers this deal as the largest in the modern history of the Russian market of fruits and vegetables. While financial details were not disclosed, Russian analysts estimate the deal at about RUB45 billion (USD$592 million). According to Sergey Rukin, head of Rost Group, the current development strategy of the company involves the expansion of its presence in key regions of Russia and better cooperation with customers. He said this allows vegetables to be harvested at the time of ripening, when they reach their best taste. Rukin noted the merging of the companies will have a positive effect on their operational efficiency and strengthen their positions in the domestic market. Some analysts also believe the deal may provide an opportunity for the newly established company to begin foreign expansion. The same position is shared by Dmitry Medvedev, commercial director of Perekrestok, another leading Russian retail chain. He said the merger can lead to an improvement of quality of final products and their better delivery to end users, which will be mainly achieved through the improvement of logistics. Overall, the deal will increase the number of greenhouse production sites to 10 under the operation of Rost Group. ●
The Rost Group’s Donskaya Usadba Plant, located in the Rostov Region of Russia, has its own gas field.
While financial details were not disclosed, Russian analysts estimate the deal at about RUB45 billion (USD$592 million).
Saudi Arabia-based Dava Corporation, owned by the Al Batal family, recently signed a new deal with Debets Schalke for the expansion of Dava's greenhouse complexes in the Al-Kharj region. In response to increased demand for fresh premium quality vegetables, Dava Corporation is announcing a series of greenhouse projects designed to provide sustainably farmed and locally grown vegetables. Dava Corporation previously entered into a partnership with Debets Schalke for a 44-hectare greenhouse complex in 2019. Together with the 36-hectare expansion, it will own 80 hectares of glass acreage. The deal is part of the Vision 2030 that contributes to sustainable developments in the Kingdom of Saudi Arabia (KSA). The Dava project, which will cover more than 80 hectares, is spread over five high technology greenhouse projects. The first greenhouse project is almost completed, and the second greenhouse project is at an advanced stage. Debets Schalke has started the engineering and delivering of the greenhouse materials for the other three greenhouse projects at the different locations in the Al-Kharj region, and groundwork is completed at these projects. “Plans for the massive expansion were already on the table before the COVID-19 outbreak,” says Wim van Weele, sales export manager at Debets Schalke. “The global outbreak underlined the importance of food independence and food safety. [And] the COVID-19 outbreak meant we also had to be inventive in order to remotely supervise the greenhouse project with an eye for detail. Working remotely requires extra attention to all parts of the greenhouse project. We also faced logistic challenges, but despite everything we managed to get everything to the different locations on time.” With the start of the Dava greenhouse complex in 2019, Dava Corporation started to provide the 44-hectare greenhouse facilities with technology to allow agriculture to flourish in the tough environment of the KSA. According to Faisal Al Batal, owner of Dava Cooperation, this is an “exciting time for Dava. Our rapid growth has presented real challenges like the construction of the five greenhouse projects at once and the numerous people that we are currently recruiting for all aspects of our agricultural business,” he said. “Growing conditions in the Kingdom of Saudi Arabia are difficult. The climate is dry and warm, but with the realization of the 80-hectare greenhouse complexes, we have the strength to meet the local demand for quality vegetables and create jobs.” Al Batal adds the company is undergoing an essential shift to a technology-assisted agricultural model to meet the consumers demand for affordable, premium-quality food.
“The large-scale greenhouse complexes will improve food safety in the Kingdom of Saudi Arabia, but the innovation will have benefits far beyond its borders,” he notes. “Our geographic position between key global waterways makes the Kingdom of Saudi Arabia an epicentre of trade and the gateway to the world. When you combine the local abundance of sunlight with energy and water efficient climate control systems, the greenhouses make a compelling case as it will be able to supply a huge part of the Middle East.●
The Dava project, which will cover more than 80 hectares, is spread over five high technology greenhouse projects.
Photograph: Debets Schalke
Energy Centre
