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. Last Updated: 07/27/2016

FATA Chief Has Fresh Ideas on Food

Gaetano de Rosa, president of Italy's FATA Group, says he's bullish on Russia despite recent setbacks on capital markets and the country's protracted battle to free itself from economic decline.

Last week, he proved his commitment by choosing Moscow as the venue to celebrate his 75th birthday -- and to oversee progress on yet another multimillion-dollar project that his company is set to unveil in the Russian hinterlands, an up to $70 million food-processing plant to be built in Karelia.

The deal follows other projects in the autonomous republic of Mary-El, Khakasia and Rostov-on-Don, ranging from refrigeration to aluminum foil manufacturing. FATA's total direct investments in Russia come to approximately $40 million -- about 25 percent of its entire world portfolio -- and the company has helped line up hundreds of millions of dollars in financing.

"I first came here at the height of the Cold War," he said in an interview Thursday. "Everything used to be concentrated in Moscow, and there was no chance for one to travel anywhere inside the country."

But the minute those restrictions began easing in the 1980s, FATA lost no time in forming joint ventures with partners in Russia's regions. The first, a $149 million venture in Volzhsk, Mary-El, was launched in 1987 and manufactures large commercial refrigeration equipment.

Other projects followed, manufacturing aluminum foil, food packaging materials and automotive pistons. But it was FATA's work arranging a $202 million loan for an agro-industrial project in the Kuzbass that set the tone for future investments.

The Kuzbass project started as a pilot program in 1991, with FATA arranging the loan and providing equipment. The project, says De Rosa, has been a "great success."

"It completely changed the economy of the region in terms of its ability to supply its food needs," he said. "And it showed that even in the middle of Western Siberia one can grow anything from tomatoes to kiwi."

Now the company is seeking to duplicate that success and is lining up similar agro-industrial projects. These include a $100 million contract to do more work in the Kuzbass region and a $90 million project in Dagestan. Negotiations also are under way in Kursk and Orenburg.

"In the last 12 years, I have paid special attention to the food-processing industry," he says.

The next most likely project will be an integrated agro-food project in Karelia. De Rosa says he expects President Boris Yeltsin to sign government guarantees for the project ranging from $60 million to $70 million during his Feb. 10 trip to Italy.

As in Kuzbass, the Karelian project envisages developing a full spectrum of agricultural producers -- from bread and dairy shops and fish and meat plants to a distillery. A total of about 1,000 new jobs will be created, says Michele Trincia, FATA's chief representative in the Commonwealth of Independent States.

Products manufactured by these facilities will be sold in Russia, but Western-standard packaging using aluminum foil supplied by FATA's other Russian ventures should allow them eventually to be exported.

Trincia says the scheme is proven to benefit a region's entire economy. "It is not a dream any longer," he says. "Everything in a region begins to move upwards, one thing helping another, like links in a chain."

De Rosa sees FATA's work in Russia as a mission, helping to break the country of its dependence on food imports that hinders its economic security. The task is a "long and winding road," De Rosa concedes, adding that it is in the regions where he sees the greatest need and opportunity.

"You cannot come to the right conclusions about the country on the basis of Moscow alone," he says. "Moscow is just an island -- a set of blinding lights -- with a tragic gap in per capita incomes currently existing between Moscow and the provinces."