Russia is using a lot of grain in feed.
import-replacement on the domestic feed additives market, said Airat Hairulin, deputy chairman of the State Duma, the lower chamber of the Russian government speaking earlier this year. A comprehensive programme in that area was re- quired, in order to promote localisation, he added. “It seems clear that the government is taking a series of e steps aimed at pushing out international companies from the Russian market or to prompt them to build capacity in Russia. The VAT hike and the new programme are parts of that campaign. This could take decades, as the government does not want to fur- ther worsen the business environment for importers right away, as this could jeopardize the Russian livestock industry, but there are clear signs that the authorities are determined to change the landscape on the domestic feed additives mar- ket,” commented a source in the Russian feed industry who asked not to be named.
Russia is set to increase feed production to 33.3 million tonnes by 2024. Russia needs more efficiently produced feed.
Analysts believe that it is very unlikely that the government will change its stance on imported feed additives, because abandoning the soft tax regime for importers seems like a first step in a broader campaign aimed to cut imports of feed additives. By charging the additional VAT, the government will not achieve its declared goal, which is to stimulate
16 ▶ ALL ABOUT FEED | Volume 28, No. 1, 2020
New sources of animal protein are needed In addition, in the new programme the government set a tar- get to deal with the problem of excessive grain use in feed. In Russia, every 1 kg of feed contains on average 670 grams of grain, Ernst & Young estimated. This high grain content is one of the main factors hampering efficiency in the Russian feed industry, Russian Agricultural Ministry officials have repeated- ly said. “The shortage of feed protein in Russia ranges be- tween 1.8 and 2.1 million tonnes per year. Domestic demand for protein raw materials is met by only 60% to 65% and this is why so much grain is used in feed, thus reducing the nutri- tional value of feed products,” a Ministry official said. “As long as the resource base of the traditional sources of pro- tein, such as soybean meal, fish meal and meat-and-bone meal is rather limited, a solution that could cut import de- pendence in this segment could be the production of microbe protein,” the Ministry said, adding that the target is to estab- lish the capacity to manufacture “hundreds of thousands of tonnes of protein” per year. The Russian company Protelux launched the first production run of microbe protein in the Leningrad Oblast late in 2018 using Unibio production tech- nology. The investment cost of the project was Rub 2.5 billion ($ 40 million) and the designed production capacity was 6,000 tonnes per year. The plant processes methane into protein bi- omass. The company said that it had passed that product for testing to its main customers on the Russian market. Protelux said that it could invest Rub 18 billion ($ 290 million) on a sec- ond larger plant with a designed production capacity of 20,000 tonnes, but first there needs to be guaranteed demand on the market. At that time, several analysts told Russian press that the prospects of selling that kind of protein in the Russian feed industry were rather questionable, since it is remains un- known to the Russian companies, so they were rather reluc- tant to work with it. The government has not provided any de- tails of how exactly it plans to ramp up the production of microbe protein in the country.
PHOTO: APH DRUZBA NARODOV
PHOTO: YAKOVLEV FEED MILL
PHOTO: YAKOVLEV FEED MILL
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