Tönnies is one of the greats in Russia

Tönnies, Germany's largest meat concern, was the largest foreign investor in the Russian meat industry in 2017. This is according to figures from the Russian Ministry of Agriculture. It also appears that foreign companies are pumping money into the Russian agricultural sector less and less often.

In the first 3 quarters of 2017, foreign parties invested $235 million in the Russian agricultural sector. Compared to the same period 1 year earlier, that is a decrease of $95 million, or a decrease of 30%. The geopolitical turmoil in Russia entails major(er) risks, which means that foreign investors are more likely to withdraw.

In 2013, foreign parties invested a record $900 million in the Russian agricultural sector. Since then, there has been a steadily declining trend.

Tönnies builds mega project
Tönnies and the Asian CP Foods are the largest foreign investors in the Russian meat sector, according to the Russian Ministry of Agriculture. For example, Tönnies invests in various projects in the regions of Voronezh Oblast and Oblast Ordorod. Tönnies will probably remain high on the list in the coming years, as the German meat concern is developing a mega project.

On balance, foreign parties are investing less and less often in the Russian meat sector. From 2000, Western companies increasingly came to Russia; from 2010 Asian companies also started investing in the Russian meat industry. In recent years, enthusiasm from abroad has declined again.

China's role continues to grow
What is also striking is that China is playing an increasingly prominent role in Russia. In 2017, China was bombed for the first time as the largest foreign investor in the Russian economy. With this, China is surpassing countries such as Germany and the United States. Compared to previous years, the Chinese investment amount increased by a factor of 3,5.

Wouter Job

Wouter Baan is editor-in-chief of Boerenbusiness. He also focuses on dairy, pig and meat markets. He also follows (business) developments within agribusiness and interviews CEOs and policymakers.

w.baan@boerenbusiness. Nl

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