Mikhail Fridman's A1 to create agribusiness
A1, the investment arm of Russian billionaire Mikhail Fridman's Alfa Group, is looking to create an agricultural firm in Russia or Ukraine, one of the world's largest wheat exporters.
"This sector is quite big and has a lot of crisis situations. Prices have been rising for the last several years and this trend is likely to continue," Mikhail Khabarov, president of A1, told Reuters.
A1's investment portfolio ranges from retail and cinemas to steel and oil. It is trying to focus on agriculture at a time of rising global wheat prices after drought hurt crop production across the globe.
"We have not found an asset to start with. Maybe we will find and buy it in 2013. There are all the conditions to create a new leader in this segment. This is our aim," Khabarov said.
Other Russian investment groups have been looking to expand into agribusiness. The sector has attracted port investor Summa Capital, investment group Basic Element and Sistema, a conglomerate with assets ranging from oil to telecoms.
Khabarov did not specify how much A1 might invest in its new agribusiness, saying only that the firm "is able to secure any volume of investments" and estimating the price of an "entrance ticket" to the sector at $100 million.
Russia, with the world's fourth-largest expanse of arable land and huge potential for modernisation in the agricultural sector, was hit by hot and dry weather this year which slashed its wheat harvest by a third.
The country is trying to position to double grain exports and grab a bigger share of growing world demand for food.