St. Petersburg, 2 June 2021. PhosAgro, a vertically integrated Russian company and one of the world's leading producers of phosphate-based fertilisers, and Demetra-Holding, a vertically integrated grain holding with export logistics and trading assets (50.001% owned by VTB), signed an agreement at the St. Petersburg International Economic Forum to share and develop new services for the agribusiness sector.
The companies agreed to support the launch of new digital projects in the area of agricultural digital ecosystems, projected to cover almost all activities of farmers and meet the needs of agricultural businesses in digital services throughout the life cycle of agricultural products in the long term.
The key project is expected to become operational in the summer of 2021. Its core is an electronic trading platform that will provide a one-stop shop for purchasing mineral fertilisers, and, in the future, seeds, crop protection products, agricultural machinery and equipment, as well as crop sales and a range of financial services for farmers. The platform will improve the transparency of the grain market and the overall efficiency of agricultural production, introducing clearer and simpler rules in agricultural trade.
The agreement envisages a turnover of about 40,000 tonnes of mineral fertilisers in the first year and the purchase of over 100,000 tonnes of crops. In turn, the volume of financial services provided to agricultural producers could reach more than RUB 100 million.
The agreement also provides for cooperation between the companies in the transportation of mineral fertilisers by RTC's fleet of hoppers (part of Demetra-Holding) and the development of new transportation services. This will allow for more efficient planning of rolling stock utilisation, optimisation of logistics routes and a reduction in the cost of mineral fertiliser delivery to farmers.
Andrey Guryev, CEO of PhosAgro PJSC: 'Ensuring Russia's food security and unlocking the export potential of Russian agribusiness require the transformation of the industry into a high-tech sector of the economy. The support for such projects gives us the opportunity to effectively address this and other tasks by laying a digital foundation for implementing innovation in agribusiness.
We are confident that, in the future, electronic trading platforms will play an important role in the digital transformation of Russian agribusiness by providing a unique experience of integrating the farms into the modern digital realm. In turn, the participation of backbone players in the agribusiness market in the development of digital solutions will help to improve the productivity and profitability of Russian agriculture and increase production in related industries.'
Yuri Soloviev, First Deputy President and Chairman of VTB Bank Management Board:
'The agreement signed is of great importance for the Russian agricultural industry. Industry-leading tools through innovative digital solutions and financial products, bundled into a single user-friendly platform, and efforts to optimise rail-based agritransportation enable domestic agricultural producers to improve their production, expand their market and gain new impetus for business development.
Such a partnership is an example of how businesses from different sectors of the economy can join forces effectively, allowing our farmers to become more competitive on global markets, increase exports of agricultural products and, in the long term, improve the efficiency of the entire Russian agricultural sector.'