World Grain - September 2021 - 46

FEATURE: RUSSIA SEEKS TO EXPAND DEEP PROCESSING OF GRAIN
Market participants said deep processing requires
cutting-edge technologies that have yet to be developed
in Russia. There is little chance this problem could be
overcome without substantial government support.
First uncertain steps
Several projects for deep processing of grain have been
announced in Russia during the past decades, but most
of them were eventually canceled or raised questions
among market players.
One of the biggest projects in this field belongs to
Arnica. The company planned to invest 21.1 billion
rubles ($270 million) to build a production cluster in
Vladivostok, manufacturing lysine monochloride, valine,
tryptophan, as well as A, B, P, and D vitamins.
In total, Arnica plans to build 10 factories for the deep
processing of grain to manufacture in total 25 product
items for the Russian feed industry, some of which have
never been produced in the country. The new cluster is
slated to become operational in 2024.
Around 30% of the production volumes are expected
to be exported to the Asia-Pacific region: South Korea,
China, Japan, Thailand and Vietnam.
Sergey Miknyuk, chairman of the Russian National
Feed Union, said it's too early to tell whether Arniva
can establish a full-cycle production and not " semi
knock-down. " Market participants also complain that
Arniva is not fully transparent about the used technologies
and the features of its production.
Another company, Saratov Biotechnology, also has
signed an agreement with the regional government of
Saratov Oblast to build a plant for the deep processing
of grain. The company plans to process 250,000 tonnes
of grain per year to produce high-quality feed additives,
gluten and bioethanol. The cost of the project is
€254 million ($300 million), and the plant is expected
to become operational in 2021.
However, the Russian feed industry is heavily dependent
on feed ingredient imports, with the exception of
lysine. Thus, it's hard to imagine that additional significant
projects in this area could be achieved in the
coming years.
" All livestock
and poultry products produced
in Russia are based on imported feed additives, "
Mikhnyuk said. " And if those feed additives run out,
this whole structure could collapse or become less efficient
and productive. "
As for vitamins, all statements about the start of their
production in Russia are " slyness, " Mikhnyuk said.
" At best, we are talking about localizing the technological
redistribution of the last link, or about the repackaging
of vitamins, as a rule, imported from China, " he said.
Similarly, Russian bioethanol production is in the
embryonic stage. Being the world's second-largest
46
POTENTIAL GRAIN DEEP-PROCESSING PRODUCTS
Glucose-fructose syrups
Amino acids
Feed vitamins
Bioplastics
Bioethanol
oil producer, Russia sees no sense in producing bioethanol
in Russia, said Alexey Ablaev, chairman of the
National Biofuel Association.
" In our country, we have so much good high-quality
fuel that it could be safely said that there is really no
need in bioethanol, " Ablaev said, noting that from the
agricultural industry's point of view, bioethanol production
could solve the problem of waste and excessive
grain production.
" We have plenty of grain and an overproduction of
oilseeds, " Ablaev said. " The easiest way of dealing
with them is through increasing the domestic demand. "
In general, the Russian deep processing of grain segment
may have bright prospects, even without largescale
bioethanol production, Ablaev said.
" Despite the obvious difficulties, and the density of
competition with China and European manufacturers,
the (bioethanol) industry in Russia has a chance to become
a leading and important one in terms of its contribution
to the country's economic security, " Ablaev said.
Competitor next door
Deep processing in Russia also will have to compete
with Belarus National Biotechnological Corp. (BNBC),
whose commercial operations are at full speed. The
new giant production cluster is designed for manufacturing
a broad range of feed additives.
The first production under the B Block, which is
comprised of feed additives production, is expected to
begin in the autumn of 2021, the company said.
In 2022, BNBC plans to produce 100,000 tonnes of
feed amino acids: lysine, tryptophan, and threonine.
BNBC will generate a profit of $700 million in the
current prices, the company's management estimated.
Only 20,000 tonnes of the amino acids are targeted for
the domestic market; the rest will be exported, including
to Russia.
Vladislav Vortonikov is a correspondent from Voronezh, Russia.
He may be reached at Vorotnikov.vlsl@gmail.com.
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World Grain - September 2021

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