government wants to spent Rub 11 billion ($ 180 million) in various forms, including on various R&D projects and as state aid to encourage new investors to engage in import-replace- ment projects in the Russian feed industry. The Russian live- stock industry is paying Rub 10 billion ($ 160 million) per year on importing feed vitamins, Rub 15 billion ($ 220 million) on imported feed amino acids, Rub 5 billion ($ 80 million) on fer- mented feed, Rub 7 billion ($ 105 million) on antibiotics, Rub 3 billion ($ 45 million) on mycotoxins neutralizers and Rub 700 million ($ 10 million) on probiotics and prebiotics. Rus- sian analysts raise concerns about whether that such a strong import-dependence could be easily remedied. “In total, Rus- sian feed additives imports reached Rub 47 billion ($ 50 mil- lion) per year, and here comes a question – would the prom- ised state support of Rub 11 billion ($ 180 million) over five years help in replacing import suppliers effectively,” Sergey Mikhnuyk, chairman of the Russian National Feed Union told to the local newspaper Agroinvestor, adding that these tar- gets are unlikely to change the situation dramatically. “In five years, we expect to create five new [feed additives] produc- tion technologies, but now 120 new feed additives are being registered in Russia per annum. In addition, there is no refer- ence to using global experience in this field, which suggests that we are trying to catch up with rapidly developing global technologies, but are moving at slower pace,” Mikhnuyk said. Russia is importing feed additives from all over the word, and the demand for feed additives on the Russian market has been gradually rising, prompting Russian companies to try to


become more efficient. Cherkizovo is importing feed addi- tives, including amino acids, adsorbents and vitamins, from the European Union (EU), North and South America and South-East Asia, according to Andrey Dalnov, a senior analyst at Cherkizovo. In most cases, there are no Russian-origin ana- logues of that production or it is losing out to the imported products in terms of quality, he said.


Timely import-replacement The new program could be very timely, as there is a lot of un- certainty about what will happen with the Russian feed addi- tives market in future, as importers reportedly are starting to go bankrupt over a retrospective VAT hike adopted by the Russian government in September 2019. The importers were instructed to pay 18% VAT, instead of 10% that was allowed in past, plus they were instructed to pay roughly $ 120 million on feed additives imported under the soft regime during the previous three years. “Those new rules are not only senseless and illegal, but could also negatively affect the entire Russian livestock industry. For many companies execution of the gov- ernment order would be fatal,” commented Svetlana Alyabie- va, general director of a major player on the Russian feed ad- ditives market Mustang Feeding Technologies. This was among the companies that protested against the VAT hike in the Russian courts. The first hearing on this issue took place on 23 December 2019. On 9 January Mustang released a statement saying that “the VAT hike has not been cancelled, although the Russian companies keep struggling against it”.


▶ ALL ABOUT FEED | Volume 28, No. 1, 2020 15


Russian feed has poor nutritional value.


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