The HarvEast group has been established as an umbrella body for the agricultural assets owned by Ilyich Steel Plant. Its shareholders will be the SCM and Smart Holding Groups. The same-name managing company HarvEast Holding has been established to manage the strategy and operations of the group.
"We believe in the potential of the Ukrainian agriculture and see this area as a strategic business for SCM. We are ready to invest in its long-term development and work consistently to create a strong, effective and competitive agricultural company. I'm confident that it will drive growth of SCM and the entire Ukrainian agriculture," said Oleg Popov, SCM CEO. "The decision to invest in agribusiness is in line with SCM's development strategy, where diversifying business and increasing the share of opportunity businesses in our portfolio are a strategic focus of our Group."
HarvEast will manage agricultural assets of Ilyich Steel Plant: farmland of over 200,000 hectares; cattle stock and pig breeding farms; other core assets (compound feed production, seed crop rearing). The assets are located mostly in Donetsk region, as well as in Zaporozhye, Cherkassy, Zhitomir regions and the Crimea.
"Ukraine is traditionally perceived as a country with a strong potential for agriculture development. This is what our track record in development of agricultural business proves. I'm confident that the merger of assets will help to boost effectiveness and capitalization of the agribusiness and unleash the potential of Ukraine's agriculture," noted Smart Holding's CEO Alexey Pertin.
Consolidation of the group will be finalized in 2012 after it takes over the agricultural assets from Metinvest, has its development strategy approved and builds a team. Dmitriy Skornyakov, HarvEast CFO, will be an acting CEO of the holding at the establishment stage.
"We will present the holding's development strategy and announce the amount of planned investment next year. We can say, however, that we are interested in the areas where we have undeniable competitive advantages today. For example, we are set to develop crop rearing and dairy farming, as the current configuration of Ilyich Plant's agricultural assets is a excellent platform for this," noted Mr Skornyakov, acting CEO of the holding.