Raw materials

Background last update:14 Jan 2016

Russian feed lysine project costs explode

The costs of the construction of the feed lysine plant in the Ishimsky area of the Tumen Oblast in Russia have increased by 35%, to US$ 100 million. International trade sanctions against Russia and devaluation of the Russian ruble are responsible for the exploding costs.

This is reported by the management of agricultural holding Jubileini, responsible for the project. The plant in Tumen Oblast should be in full operation in 2016. Deep processing of 120,000 tonnes of wheat per year will allow the plant to produce 30,000 tonnes of feed lysine annually. Half of this amount is to be sold at the domestic market, while 10,000–15,000 tonnes will be exported to Iran, Iraq and Kazakhstan.

Nikolay Mamontov, the CEO of Jubileini, says the sanctions against Russia and devaluation of the ruble have made the implementation of the project more complicated as the costs of the imported equipment in rubles have sharply risen. The company is looking for new loans to finance the construction. However, Mamontov says he believes that despite the new challenges the project should be finished in time.

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