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. Last Updated: 07/27/2016

Trade Company Plans Domestic Investment

ST. PETERSBURG -- Soyuzkontrakt, one of Russia's largest trade and distribution companies, has announced its intention to invest $500 million in the Russian economy, a move that could make it one of the country's major domestic investors.


Press spokesman Pyotr Gadlevsky said this week that the company, best known for its distribution of Herschi cola and frozen American chickens, plans to invest the money through 1998 in a range of local industries and development projects across the country.


If Soyuzkontrakt goes through with its investment plans, it could become one of the largest investment programs by a domestic investor to date.


"This looks like a very big amount," said Ilya Karesev, vice president of the U.S.-Russian Investment Fund in St. Petersburg. "Many companies and banks are investing, but in smaller amounts." Most domestic investment projects involve "millions of dollars," he added, but not hundreds of millions.


Gadlevsky said the firm's investment was still probably less than that of giants like Gazprom, but represented the trading company's solid position in the country's economy.


"Soyuzkontrakt is one of the strongest companies, so it's only right that it should invest such an amount," he said. Founded in 1991, the trading company achieved a daily turnover of $5 million last year.


Some money might be borrowed from banks to finance the investment, but he said most would come from the company's own accounts.


Moscow officials could not be reached for comment.


Several projects, such as the reconstruction of the Volokalamsky meat-processing plant, are already under way. Although most of the investment will be concentrated in the Moscow region and the country's south, several are lined up for the northwest, including a possible miniport on the territory of Northern Shipyards.


In addition, the company has been handed the task of reanimating a chicken factory in the Leningrad region, now hovering on the brink of bankruptcy.


Soyuzkontrakt was named administrator of the plant Aug. 12 by a regional arbitration court.


Nikolai Khaustov, a representative of the St. Petersburg office's investment department, said the Lomonosov chicken-processing plant's management approached the company with the original request for support.


Within three months, he and his team must present a strategic plan for acceptance by Soyuzkontrakt and creditors of the factory, who are currently owed more than 15 billion rubles ($2.8 million). Creditors include the electric company Lenenergo, the Vodokanal water company and grain suppliers.


Despite Soyuzkontrakt's willingness to examine the project, Khaustov said the firm was waiting for his report before signing on the dotted line. "There will be no altruism here. We're a commercial firm," he said.


Officials at Soyuzkontrakt, one of the major importers of American-produced frozen chickens in Russia, see the poultry plant as a means to expand the market, and have no plans to curtail its current imports.


"We'd like to offer our consumers an alternative to what we've been selling for so many years. That is, a domestic product," said Khaustov.