Greenhouses Are Russian Agriculture’s Most Profitable Sector, Study Shows

A recent analysis by the Russian Agricultural Bank has shown that greenhouses are the most profitable part of Russia’s agriculture sector, reports.

The business sector has attracted investors after the Russian ruble devaluation and the product embargo, says the study based on the bank’s calculations, following reports provided by credit users for the four quarters ending with October 31, 2019. There are 11,000 agricultural enterprises among the bank’s clients.

The experts evaluated that greenhouse growers have the highest EBITDA among all the agricultural producers: it increased by 8% over the year, ending up at 52%.

The greenhouse business started growing rapidly after the introduction of a food import embargo from EU countries and the devaluation of the ruble in 2014, explained a representative of the bank. The market leader, Eco-kultura, have increased their greenhouse acreage. The son of Russian oligarch Roman Abramovich, Arkadiy, engaged in greenhouse construction, and companies close to the owner of auto dealer Avilon (GC Moyo Leto) got interested in the sphere too.

High productivity of modern greenhouses enables their profitability, considers the bank’s representative: it is possible to get up to 80 kilos of crops per square meter, and the prices of vegetables, especially out of season, in winter and in early spring, are rather high. Microgrids for greenhouse heating and lighting contribute to the profitability as well, the investors who constructed them can boast even higher numbers, mentioned the representative.

The investments in greenhouses in 2015-2019 exceeded $3 billion, with over 1100 ha of new greenhouses allocated, according to estimates by the director of the National Union of Fruit and Vegetable Producers, Mikhail Glushkov. Russia is now self-sufficient in cucumbers, however 40% of tomatoes are still imported, mostly from Turkey.

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