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. Last Updated: 07/27/2016

Russian Grain Firm Offers Land to Arab Investors

DUBAI — Russian grain-processing firm PAVA, which plans to offer access to highly coveted Russian farmland by way of an equity stake in the firm, said on Tuesday that it will meet Gulf investors in an October road show.

The move sidesteps Russian law, which prevents foreign investors from owning farmland, and helps Gulf investors secure food supplies.

Galina Balayenkova, PAVA's director for international business development, said the company had scheduled a trip to Saudi Arabia and the United Arab Emirates to meet investors.

PAVA, the first Russian grain-processing firm to float on the stock market, will offer Gulf Arabs the chance to invest in 500,000 hectares (1.24 million acres).

"Gulf investors continue to take keen interest in agricultural investment overseas, which falls in line with the government course," Balayenkova said in a statement.

"It is a vital issue due to scarcity of own resources, while the growing world population is driving grains demand and food prices are hitting new highs. On that score, there are strong mutual advantages for the proposed partnership."

Gulf countries, mainly reliant on food imports, have ramped up efforts over the last year to buy land in developing nations ranging from Pakistan to the Philippines and Ethiopia.

The land in Russia will be used to produce grains including wheat, barley, rye and sunflower seeds but could grow fruit and vegetables in the future.

In May, PAVA said it planned to sell shares through private placements of up to 40 percent of shares in Russian Agricultural Division (RAD), the PAVA subsidiary responsible for land assets.

It is pursuing a tenfold increase in grain production by restoring vast tracts of fallow Siberian land slightly larger than the emirate of Dubai.

The company produced more than 30,000 tonnes of grain last year. It plans to double output this year and reach more than 300,000 tonnes in 2010.