TH Group inks a co-operation deal with Russia’s Kaluga oblast

May 18, 2016 | 11:54

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Vietnam’s TH Group has inked a co-operation agreement with the government of Russia’s Kaluga oblast to build part of its $2.7 billion hi-tech concentrated dairy and fresh milk production project there.

The inking ceremony was witnessed on May 16, 2016 by Prime Minister Nguyen Xuan Phuc and Prime Minister Dmitry Medvedev. The deal was signed by TH’s chairwoman Thai Huong and Kaluga’s governor Anatoly Dmitriyevich Artamonov.

Under the deal, TH Group will invest $190 million into building three clusters of hi-tech dairy farms in Kaluga’s Ulianov and Mosacalskyi districts located in the European part of Russia.

The farms, which will cover 70,000 hectares and also produce safe vegetables and fruit, are expected to become operational next year.

The farm in Kaluga will be similar to TH’s existing $1.2 billion hi-tech concentrated dairy and fresh milk production project in the central province of Nghe An’s Nam Dan district.

This farm will use the world’s most modern technologies made by Israel’s Afimilk, Germany’s GEA, Sweden’s Delaval and the US’ BouMatic. Some Russian technologies will also be used at this farm.

It is expected that in mid 2017, the Kaluga project will market its first high-quality milk products.

Under the $2.7 billion project, which is based in Russia’s Moscow and Kaluga oblasts and is Vietnam’s largest agricultural and foodstuff project in Russia, TH will invest $500 million into the first stage.

In this first phase, the group will raise 45,000 cows, and build a milk processing mill having a daily capacity of 800 tonnes and a cattle feed mill with an annual capacity of 400,000.

After full completion, the $2.7 billion project will have 350,000 cattle, with a total daily capacity of 5,900 tonnes. The total concentrated material area will be 140,000 hectares.

TH is also planning to establish a large distribution network in Russia, including 300 True Marts.

Thai Huong said that this project would significantly meet Russian people’s rising demand for fresh milk and help Russia reduce its milk imports.

“Russia has great potential for milk development. This offers a big opportunity for TH to implement this project,” Huong said. “The project also receives big incentives from Russian authorities.”

Currently, Russia, which is the world’s second largest importer of milk products, can produce only 18 million tonnes of milk per year, meeting nearly 50 per cent of the local market’s milk demand. Russia has to import the remaining milk volume to meet such demand.