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The Thai investor was sent to the Soviet Harbor
Leong Chi Chung, executive president of Sutech Engineering, talks about the implementation of the project to create a sugar factory in the Far East
The Thai company Sutech Engineering Co. Has highlighted its plans to create its own factory for the production of refined and ordinary sugar in the Khabarovsk Territory. Her subsidiary, the future operator of the project, is registered in Russia. Leont Chi Chung, executive vice president of the company, tells what further steps will be taken by the investor in the construction of the sugar factory.
- You have already issued documents on the registration in Russia of a subsidiary of Sutech Engineering Co. in the Federal Tax Service?
- Yes, and we have received approval from Russian tax structures.
- What is the name given to the subsidiary?
- OOO Far Eastern Sugar and Derivatives Plant.
- How much will the authorized capital of the enterprise be in rubles?
- At present, the authorized capital of the company is only 100 thousand rubles. But after implementing a number of relevant approvals, it should be increased to 30% of the total cost of the plant's investment project.
- Who will act as the main shareholders and top managers of the company?
- The company will ultimately be owned by three organizations from the ASEAN countries - by 80-90%. At the same time, there will be some balance between them and one or two Russian companies. The specific names of the project investors will be announced in the established order. At the same time, the company has already been formed. But, still, it's still too early to hire and appoint its management team. Its formation will be carried out in due time in the established order.
- What should be the next steps in the implementation of the project?
- Now the company is in the process of applying for the project status of the Priority Investment Project of the Khabarovsk Krai, as well as documents for entering the special economic zone of the port of Sovetskaya Gavan. At the same time, it is waiting for the requested approval from the federal authorities to import raw materials.
- When is your company planning to start design and construction work within the project?
- Preliminary work on the design of the plant has now been completed. Further refinement will be carried out in the following months before the launch of the plant - some or other design orders continue to be gradually surrendered by service contractors and equipment suppliers. If all the necessary approval is received from the relevant state regulators, the company can begin construction of the foundation in the port of Sovetskaya Gavan in the second quarter of 2017. In general, the construction of the entire plant will take about 24 months.
- Previously, there was information that a land plot from 6 to 7 hectares would be required to create the plant. Are these numbers correct?
- We have estimated that the size of the initially proposed site is reasonable, but not sufficient to implement long-term project plans. After that, thanks to the joint efforts of the company and the authorities of the Khabarovsk Territory, a more suitable place was found in the region for the implementation of the project - in a small distance from the first. Its area is already about 48 hectares, it is located within the developed territory of the special economic zone Sovetskaya Gavan.
- How much will the total investment of the project be?
- The total investment of the sugar factory is $ 210 million, of which $ 150 million is capital expenditures and $ 60 million is working capital.
- The data was sounded that the plant will produce 100 thousand tons / year of high-quality refined sugar, 350 thousand tons / year of ordinary white sugar, and 50 thousand tons / year of brown sugar of high quality. Are these the right intentions?
- So far, the plans remain so. But it is important to bear in mind that while we are still waiting for some permits from the relevant Russian government authorities. If there are restrictions for the supply of our sugar to the domestic market, then, according to this, we can make some changes to the existing production plans. At the same time, we are currently developing such plans with regard to the products of the plant with added value - sugar processing products. About them, suggesting investing in later stages, will be announced in due time. It should be noted that permits from Russian government agencies can affect the already existing plans for the production of products based on sugar.
- Raw materials for sugar production will be supplied mostly from Asia and Australia?
- Yes exactly.
- Has the company already studied the market of the Far East and Russia as a whole?
- Yes, the company has already made a preliminary assessment of the sugar market in the Far East. To obtain more accurate data about it, specialist consultants will be involved. In fact, getting information about sugar cane is a continuous process, not an action taking a certain period of time.
- Where will you supply your sugar products and in what quantities?
- In the Far East, the demand for sugar is about 250 thousand metric tons / year. For its part, the company is ready to supply all this volume. But we are awaiting the approval of the supply of all volumes of future products, or the imposition of some restrictions on them by the Russian state authorities.
- In this case, the sugar produced by your plant will be supplied from the Soviet Harbor to China, too, is not it?
- Yes, the export of the plant’s products is also planned to countries neighboring Russia, including China. Investigations of everything possible for the supply of products of the plant market are currently underway.
- Your company will have to compete with such a regional company as Primorsky Sugar. How do you plan to work around it?
- Competition from players already existing in the sugar market is expected by us. We are confident that we will take our solid position on it. In the first place - due to the production efficiency, which is based on the application of the latest technologies in the production of sugar, efficient logistics, sales systems and marketing strategies.
- What price policy will your company adhere to?
"We hope that you understand sufficiently how pricing is a delicate matter, and therefore you realize that the plant's pricing policy can be formed only as the project approaches the market stage of its implementation. At the same time, it should be remembered that, ultimately, any pricing strategy should first of all be based on market realities, within which - take into account the sensitivity of consumers to the quality of products, the need for its efficient distribution among them, as well as their quick response to any actions On the part of competitors.