Sojaprotein builds plant worth EUR 22.5 million to intensify organic production - Export value increased by 100 percent

The company Sojaprotein has announced that it will continue to implement the intensive development strategy by building a new concentrate plant, which should significantly improve the performances of that company as early as at the beginning of next year.

According to the words of Director General Branislava Pavlovic, the export expansion of this Becej-based company has been resumed and it increased the value of export in the first quarter of this year by as much as 100 percent.

The construction of Sojaprotein's factory of traditional soybean concentrates commenced in March and should be completed until September, while the production is planned to start before the end of the year, Ms. Pavlovic announced at the Belgrade Stock Exchange, which has organized the Day of Listed Companies for the first time ever.

In this project, worth a total of EUR 22.5 million, about 6 million euros have been invested so far. When it comes to funds for the investment, 70 percent are provided from a loan, while the rest will be provided by the company from its own sources. The annual production capacity of the new plant is expected to amount to 70,000 tonnes of soybean concentrates.

The next phase of works, which is scheduled to commence in 2012, is planned to include the construction of a plant for conversion of traditional soybean concentrates into functional ones. The investment in that phase of works, inclusive of the costs of necessary equipment, will amount to EUR 19.5 million.

Functional soybean concentrates are products of a higher phase of treatment than traditional concentrates. Such products have the highest nutritional characteristics and are used in the meat-packing industry as a replacement for animal proteins.

The annual capacity of the plant will amount to 15,000 tonnes of functional soybean concentrates and the whole production will be intended for export.

The director of the leading soybean processing plant in central and southeast Europe pointed out that Sojaprotein produced exclusively genetically unmodified products.

Sojaprotein now produces a total of 230,000 tonnes of products per year, major portion of which are soybean seeds - 150,000 tonnes.

Once the new plants are put in operation, the annual production will stay at the level of 230,000 tonnes, but the structure of products will be changed – concentrates will completely replace soybean seeds.

Prospects of the market expansion

Ms. Pavlovic also said that Sojaprotein's export in the first quarter of 2011 had grown by 48 percent in terms of quantity and by 100 percent in terms of value, reaching EUR 11 million.

When it comes to future buyers of new products, initial contacts have already been made with the largest manufacturer of fish products in Norway - the company Skretting, and BioMark from Denmark.

- Contacts have also been established with future distributors such as Dutch Barenc Group, British Kerry Group, etc. The market of Russia is also interested in our products, as well as the market of Turkey - said Branislava Pavlovic.

Financial indices

If we take a look at the financial position of the company, the size of its assets have been reduced. The first reason is the depreciation of Dinar against Euro, while the other, more important reason is the elimination of one business line - trading in agricultural products.

Namely, Sojaprotein has transferred these activities to the other member of Victoria Group - Victoria Logistic.

- That has also affected the change of the source of finance. Sojaprotein has significantly reduced its obligations by eliminating the production line that was mainly financed from loans. A drop in long-term interest-based obligations exceeded 60 percent, while a drop in short-term obligations amounted to about 50 percent - said Ivan Dzakovic, a financial analyst at Sinteza Invest Group, the corporate agent of the Becej-based manufacturer.

Also, the profitability of Sojaprotein has been significantly improved (partially due to the absence of exchange rate differences) so that the preliminary gross profit for the first quarter exceeded the level of RSD 400 million.

Elimination of production line and transfer of activities to Victoria Logistic

When asked how satisfied they were with the move that the production of agricultural products be transferred to Victoria Logistic, CEO Pavlovic told eKapija that Sojaprotein had to be oriented toward improving its core business and that it was an inevitable decision for the company's development.

- The volume of operations involving other agricultural products started to "suffocate" the core activity of Sojaprotein, which affected our business results. Investors interested in purchasing shares and stakes in the company were confused with what we actually do to make a profit. Since EBITDA now looks better, that "transfer of activities" seems to have been a good business move.

According to financial reports, the sale of all company's products grew in 2010, while lecithin sales soared the most.

New jobs

Sojaprotein will employ a total of 30 new workers in 2011, mainly technicians. As the director of the largest soybean manufacturer explained for our portal, 14 people have already been selected and must complete an adequate training to start working for the company.

Shares

Since the beginning of the year, the price of shares of Sojaprotein, which are listed on A listing of the Belgrade Stock Exchange, has grown by 18 percent, while the average daily turnover in that period amounted to RSD 3.3 million.

The shares of the Becej-based soybean processing plant currently cost RSD 1,000 a piece. Their maximum price over the last 12 months amounted to RSD 1,050, while the minimum price was RSD 642.

J.Đ.