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Don Agro set to invest S$1.9m to expand storage capacity
RUSSIAN agri and dairy firm Don Agro International on Thursday said the group is set to invest some S$1.9 million to expand its storage capacity in a bid to improve yields and enhance profitability.
The group plans to increase its overall storage capacity facilities to 95,000 tonnes from 65,000 tonnes.
This will allow Don Agro to store larger amounts of wheat and sunflower seeds for longer periods, with the intent to sell more during "peak pricing periods", resulting in the potential for greater profitability margins, the company said.
It will also be able to "harvest sunflowers more quickly and sow winter wheat within the most optimal time frame", Don Agro said.
Construction of this additional storage capacity has begun and the group expects completion to take place within four months.
In tandem with its growth plans, the group has also invested S$0.4 million in new machinery to save on costs and reduce the reliance on labour, it said.
Don Agro will be using internal funding for both investments.
Looking ahead, the group plans to scale its business through the expansion of its arable land bank. Don Agro is also exploring opportunities in mergers and acquisitions, joint ventures and strategic alliances with both domestic and foreign companies, it said.
Evgeny Tugolukov, executive chairman of Don Agro said: "Fresh off our initial public offering in February 2020, we have begun to execute the various strategies for growth to strengthen our position as one of the largest agricultural companies in the Rostov region of Russia.
"This additional capital expenditure on new machinery and the expansion of our facilities will allow us to improve yields within our crop business and enhance our operational efficiency."
Shares in Don Agro last traded at S$0.32 on June 1.