The key shareholder in Ukrainian agroholdings UkrLandFarming and Avangard, Oleh Bakhmatiuk, has forecast that after the merger the agroholding will become the largest in Eurasia.
"We’re making the final calculations so as to have the right to announce the creation of the largest agrarian company in Eurasia. There has never been an agroholding like it in the region," the press service said, citing the businessman commenting on a decision to transfer a 77.49% stake in Avangardсo to ownership of UkrLandFarming.
"Due to the continual threat of food crisis, we’re planning to become a flagship of the Ukrainian food export to emerging countries and a leader on the domestic food market," he added.
The businessman said that he had decided to rationalize his ownership rights in the two companies so as to obtain the maximum synergy for the two businesses.
Bakhmatiuk said that the united structure should first make savings on the purchases of fodder grain used for production of mixed fodder for egg production by Avangard.
"Having a fully closed cycle – from supplies of raw materials for mixed fodder to eggs and egg powder, the company could reach the most favorable figure of production cost for the market," he said.
He added that production efficiency would grow thanks to the joint use of grain storage facilities and other resources of Avangard and UkrLandFarming.
"In addition, the united company would have marketing advantages, as it would be able to use more crossing channels for sales of the two businesses both on the domestic market and to expand export potential," Bakhmatiuk said.
The deal would be closed in the next two weeks. Shares of Avangardсo are to continue being listed on the London Stock Exchange.
The report says that the united holding would become the owner of the largest land bank in Ukraine – almost 500,000 hectares, a herd of 65,000 cows and a flock of 24 million hens.
In addition, the company would own 18 meat factories, two leather factories, six seed plants, six sugar refineries, three elevators with a total storage capacity of 645,000 tonnes, four grain storage facilities and 110 horizontal storage facilities.
The company will manage 19 poultry farms, three multiplication farms, nine zones for raising chickens and Imperovo Foods egg processing plant.
The share of Avangard and UkrLandFarming in 2010 on the Ukrainian beef market was 14.3%, than for grain market – 3%, sugar – 8.6%, leather – 12.9%, eggs- 26%, powder egg – 79% and exports of eggs and egg products – 84%.
