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Russian growth

“Another 260 hectares of greenhouses planned in 2019”

“The greenhouse industry in the Russian Federation has demonstrated a significant growth during the past 5 years, due in no small part to the boycott,” says Elvira Sakhabutdinova of Vostock Capital. “The market of protected ground vegetables grows annually, and greenhouse area increases by 1-4% every year. In 2014 the total area of greenhouses comprised about 2300 ha, by the end of 2019 this number exceeded 2500 ha. Not only the quantity, but also the quality of the greenhouses has improved.”

Quantity and quality
Vostock Capital organizes Greenhouse Complexes Russia and CIS, an annual forum on the Russian greenhouse market, and therefore they are on top of the developments in the industry. According to Elvira the horticultural industry has grown not only in quantity, but also in quality.

“Five years ago the share of outdated greenhouses, which demanded modernisation, equaled about 70%, whereas to date only 52% of greenhouses require reconstruction. Moreover, every year more and more cutting-edge greenhouse complexes are being constructed. 260 ha of new greenhouses are planned to be implemented in 2019 and 250 ha are planned to be implemented in 2020”, she explains.

The output of greenhouse vegetables has been growing together with the acreage. “Annual increase of greenhouse vegetable yield comprises 13-14%,” says Elvira. “In 2018, the industry demonstrated especially successful results: protected ground vegetable production grew by about 20%. In 2014, 66.8% of cucumbers and 20.2% of tomatoes were produced in the country. Meanwhile, in 2019, these figures will comprise 95% and 65% correspondingly. The total yield of greenhouse vegetables in Russia by the end of 2018 equaled 930,000 t, while, in 2014, this number comprised only 691 000 t. What is more, in the upcoming 4-5 years the expected yield is about 1.5 m t.”

The governmental role
According to Elvira, the role of the state’s support for the industry cannot be underestimated. “In 2014 a support program for the greenhouse industry was started. The program allowed growers to receive financial support for the construction and modernization of greenhouse complexes: 20% reimbursement of costs and preferential investment loans. This program enabled many growers to improve the quality and quantity of their greenhouse facilities. The government decided to change the program in 2018. They lowered the cost of reimbursement to 10%, while the term of preferential loans was prolonged from 8 to 12 years. In the upcoming future the measures of national support will be changed in accordance with the demands of the industry to continue further stimulation of growth.”

“Thus, the boycott allowed Russia to focus on domestic greenhouse industry and implement a number of successful measures to boost protected ground vegetable production,” says Elvira. “The results, which the country has achieved for the last five years, enable us to be optimistic about the future development of the industry. To date there are over 60 large ongoing and planned investment projects on the construction and modernization of greenhouses with a total investment of over 240 bn RUB.”

Enough reason for the team of of analysts of Vostock Capital and Elvira Sakhabutdinova to look forward to their fourth annual forum of Greenhouse Complexes Russia and CIS. “The interest in it continues to grow due to the development and expansion of the greenhouse industry nowadays. The market is growing rapidly, and it demands new information, knowledge and experience exchange which we happily provide at the event where the key players of the industry are always present.”

For more information:
Greenhouse Complexes Russia and CIS www.greenhousesforum.com


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