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ECONOMY
SINGAPORE SUCCESS STORY IN RUSSIA
Olam Revving Up its Dairy Business in Russia
Singaporean firm Olam International, through its Russian partner Rusmolco
has risen to become one of the largest suppliers of premium milk in Russia
Russia and Singapore have
old and very warm trade and
business relations that go back
many decades. Savvy investors
such as Olam have found success with
their investments being directly aligned
with the objectives of the Russian
government.
In a recent move the Singaporean
government while recognising Russia
as a key country for Singaporean
investment potential, has been
doing much to encourage private
entrepreneurs as well as Singaporean
government funds to invest in a country
which is on a fast track to recovery from
Western sanctions. An important tie-in
in this endeavour has been that of the
Singaporean firm Olam International,
which through its Russian partner
Rusmolco has risen to become one of
the largest suppliers of premium milk
in Russia. The Singaporean company
which bought into a majority stake in
Penza-based firm is already well known
for its contributions to the agricultural
sector in Russia’s Penza region, and is
looking to expand its footprint deeper
into Russia’s agriculture business.
Vivek Verma, MD and Global Head of Dairy, local dairy farming industry) and Olam’s
Coffee and Funds, Olam International
One of the sectors in Russia’s economy
that is seeing considerable transformation
in recent years has been the area of dairy
farming in which Olam is committed to be
more deeply involved by investing in farm
upgrades to international standards and
the implementation of best practices in
farming. This transformation is evident
in the replacement of imported western
dairy products by locally produced ones (a
good move for consumers as well as the
(Left & above): Rusmolco has already achieved an
average production of over 9 000 kg per cow a
year which is two times higher than the national
average milk production.
In 2017, Rusmolco expects to generate 2400
Holstein replacements for its herd from its own
reproduction centers.
partnership with local businessmen has
been a rewarding one for both parties
involved. The Federal government too is
highly supportive of such alliances and
that in itself is an excellent incentive for
furthering one’s involvement in its agenda
for recovery of the country’s economy.
Chairman of the National Dairy Producers
Union of Russia (Soyuzmoloko) Andrey
Danilenko has said it is a top priority for
the Ministry of Agriculture to develop
self-sufficiency in food production and
that milk is high on the priority list.
The government has also earmarked
significant funds to subsidise cost of
capital, purchase of agri machinery,
import of cows, genetic research and
promotion of high quality milk, with
subsidies linked to farm size. This bodes
favourably for Olam’s expansion plans.
Rusmolco today is the third largest dairy
farm operator in Russia with 13,600 head
of livestock, of which 7,300 are milking
cows, shares Vivek Verma, Managing
Director and Global Head of Dairy, Coffee
and Funds, Olam International.
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