The NLGC signed the trade and investment agreement with the Chinese company China Chengtong Investment for a total amount of over 2 trillion rubles
17 July 2022
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The NLGC signed the trade and investment agreement with the Chinese company China Chengtong Investment for a total amount of over 2 trillion rubles

On June 17, 2022, during the anniversary 25th St. Petersburg International Economic Forum (SPIEF), at the Russian Export Center venue a package Agreement on strategic cooperation and expansion of mutual trade between the Russian New Land Grain Corridor Group of Companies and the Chinese state corporation China Chengtong International Investment was signed in the presence of Director General of the Russian Export Center Veronika Nikishina.

The document was signed by CEO of NLGC LLC Sergey Pushkin and CEO of China Chengtong Zhou Liqun.
In accordance with the document, the Russian and Chinese parties agreed to develop infrastructure and increase the production of grains, grain legumes and oilseeds in the territories from the South Urals to the Far East, and grain export in the amount of 1.9 trillion rubles with settlements in national currencies.

In addition, the parties plan to organize deliveries with subsequent localization of technological equipment and agricultural machinery production in the Russian Federation in the amount of 150 billion rubles, as well as joint investments in the amount of 50 billion rubles.

“We have been working on development of the infrastructure and mechanisms for realizing the great agricultural potential of Ural, Siberia and the Far East for many years.

With science-based, careful approach to production, you can first triple - up to 65 million tons per year, and then increase the production potential to 80 million tons per year, through the development of the "contract farming", using modern agricultural technologies, fertilizers and processing additional lands.

It is confirmed by the results of the largest sectoral scientific study we organized since the Soviet period, which is being analyzed by eight specialized Institutions.
The realization of the production potential of these regions will not only strengthen the country's food security and its economy, but will also help to double Russia's total exports, make Russia an important food supplier to China, the countries of Central Asia, and, in the future, to the countries of Greater Eurasia (with the total population over 4 billion people).

It is particularly important in view of the global climate change and the deterioration of the world food situation,” said Sergey Pushkin, CEO of the parent company of the New Land Grain Corridor Group.

An increase in grain production associated with the development of "contract farming" (which is a well-established mechanism for production stimulating through an advance payment at the amount equal up to 50% of the annual planned supply volume and formula pricing) also involves active development of the elevator and grain logistics infrastructures.

Today two of seven linear grain elevators (each for 200 thousand storage tons) are designed.

Grain Terminal Zabaikalsk (GTZ) is intended to become an important element.

This is the world's first specialized land grain terminal with a capacity of 8 million tons per year and actually the largest grain logistics facility of the country.

The Group's investments in the terminal will amount to 9.5 billion rubles (as of today it is equal to over 8 billion rubles).
The facility is unique in terms of both technology and the level of biological safety, complete traceability, non-mixing of batches and other important technological aspects.
The terminal is scheduled to be put into operation in September 2022 in the context of the Eastern Economic Forum.

For reference:

The New Land Grain Corridor Group of Companies is a production holding structure implementing a program to develop grain production and grain logistics infrastructure in Ural, Siberia and the Far East.

The New Land Grain Corridor program is supported by the President of the Russian Federation, the Chairman and the Government of the Russian Federation, Intergovernmental commissions and the Eurasian Economic Commission.
China Chengtong is managed by the State Assets Control and Management Commission under the State Council of the People's Republic of China, and is designated as a state asset management company.

It is a major shareholder of several central state-owned enterprises such as National Petroleum and Natural Gas Pipe Network Group Co., Ltd. (PipeChina) and China Green Development Group Co., Ltd. (CGDG).

China Chengtong was working with the assets of Sinopec International Petroleum Exploration and Production Corporation and coordinated the China Railway Materials Group Corporation.

It holds shares of CMST Development Co., Ltd., China Chengtong Development Co., Ltd., Guangdong Guanhao High-Tech Co., Ltd., Yueyang Forest & Paper Co., Ltd., MCC Meili Cloud Computing Industry Investment CO., Ltd. and CTS International Logistics Corporation Limited, and also holds shares in companies listed within the state territory and abroad, including China COSCO, China Shipping Network Technology Co., Ltd., CRSC, CICC, Dongxing Securities, etc.

The fields of activity are investments, equity transactions and assets management, as well as technologies, multimodal logistics, exports and imports.

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