Schelkovo Agrohim: Barrier of Distrust in Russian Technologies Has Been Overcome in the South
Russian manufacturers of crop protection agents have found themselves in a difficult situation due to a leap in prices against the backdrop of unstable exchange rates. Salis Karakotov, General Director of Schelkovo Agrohim, spoke on the market developments
You have planned to open a sunflower breeding center in the South and start working next year. Is everything going to your plan?
Yes, absolutely. We set out to create a state-of-the-art breeding center in the next two years. In fact, it will be an innovative institute, where they will master new breeding techniques and methods.
Is the previously disclosed amount of 700 million rubles of investment in the project still relevant?
It is, tentatively. Most likely, this amount will increase by at least 1.5 times. And we will keep approximately within 1 billion plus rubles. An own laboratory center will be built, conditioning of parent components, storage, as well as areas for separate cultivation of individual components of seed parents. And, of course, there will be modern equipment necessary for a breeding center.
Your company has sown over 3.5 thousand hectares of sunflower hybridization plots in the south of the country. How will this work progress next year? What are you planning for 2024?
We have sown 3,650 hectares this year, already harvested the crop and are reaching a production volume of approximately 250–270 thousand seed units. This is approximately 550 thousand hectares of oilseed sunflower.
We've received a little less than our planned expectations – approximately 3 thousand tons of grain heaps. Still, this is quite close to the expected result.
I want to say that we will be able to sow over 7 thousand hectares and get a good yield of crops by the end of 2024. By 2030, and maybe two years earlier, we will have more than 15 thousand hectares sown. These will be the Stavropol Territory, Krasnodar Territory, Rostov, Voronezh and Belgorod regions.
Focus on import substitution
There were some legislative amendments coming into effect from September 1. And now it is more difficult for foreign companies to do business in Russia. How much did this change the market?
I believe, it wasn't meant to create any difficulties for foreign companies; it’s just that the necessary ideology of technological, seed and food sovereignty has finally matured in our government structures. Following this course, it is impossible to ignore this global program.
Foreign companies finally have the opportunity to forge a bond. And they are actually making certain positive steps towards the Russian breeding companies.
Industry experts noted that the prices for crop protection agents have been decreasing throughout the year. In this context, what is the provision of farmers with crop protection chemicals, and, in particular, that of the Southern farmers?
Indeed, the prices for crop protection agents have decreased. On average, they have decreased by 18-20% compared to 2022. And to be honest, the price advance in 2022 was sporadic – it was caused by an instantaneous and short-term increase in the value of the dollar against the ruble. This coincided with our purchases of raw materials, and with the fact, as I predicted, that China would someday raise prices for active ingredients. And China did it exactly in 2022, and that boost coincided with the rise in the dollar. In July 2022, the situation began to reverse itself. This led to the prices becoming significantly lower in 2023.
In our country there is no problem of supply of the crop protection products. I must say that this market belongs not to suppliers, but to buyers. The buyer dictates, makes a choice and has its preferences.
The Russian market share is growing. In 2023, our company and a couple of other businesses grew by about 15-20% in terms of supply volumes. The consumption of crop protection agents is also growing. What does this mean? Those used to good technology do not take a step backwards.
Specifics of the South
In your opinion, what is the market situation in the South of Russia?
In the South, we have overcome the barrier of distrust in the Russian-manufactured crop protection products. We have overcome the barrier of distrust in Russian seeds. And we have cleared the barrier of distrust in Russian technologies.
When we see that in the South of Russia the largest companies trust their own Russian technologies of crop protection products, fertilizers, machinery and, of course, science, this cannot but rejoice.
I was once again convinced that we have grown in the market of the Krasnodar Territory, despite the fact that the prices have dropped. While the prices fell by about 20%, we increased the delivery volumes by almost 30%. For representatives of large businesses, it is important that with the Russian resources they achieve even better results than before.
How do you evaluate your participation in the 30th International Exhibition YugAgro 2023?
I will tell you that this year it is an awesome event that captures the imagination. The enormous interest indicates that it provides benefits, and every comer can see that agriculture is alive and winning. It is growing and rising. And I think that this exhibition is the successful completion of the agricultural year, a showcase of that success.