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Sergei Darkin: "Our main task is to invest money in the Russian Far East, we are only doing this"
Businessman Sergei Darkin - about fish, gold, power, new partners and 1 billion dollars
Sergey Darkin started out as an entrepreneur: from the beginning
For two years, Darkin was in charge of the Volga Federal District as Deputy Minister of Regional Development, but in the end the department was abolished, and the ex-governor was drawn to the old: he again earns money as an entrepreneur. Its most significant asset is the Nakhodka base of active sea fishing. Darkin calls it “one of the most stable enterprises in the country,” stresses that it regularly pays dividends (according to the company, from 2003 to 2014 it paid out 7,9 billion rubles in dividends).
Darkin is ready to dig into new industries. In 2014, he created PJSC "Corporation for the Development of the Far East", which by the beginning of this year was renamed the Pacific Investment Group (abbreviated as "Tiger"). Now, according to him, three funds for $ 1,4 billion are being formed for investments - from bottling water to developing gold deposits. And everything is only within the region. “And I can't do anything else, except how to invest money and develop the Far East,” said Darkin.
- You are back in business. How has the business climate in the country changed, what changes do you, as an entrepreneur, feel?
- I recently started doing business again. I cannot estimate in such a short space. But as for tax legislation, I think that we have it very comfortable. All the new opportunities in the Far East - a free port, TOP - it's all good if there is good administration of these projects. If there is some official who will personally deal with this and be responsible for it. If not, then they won't work. Everything else depends on the entrepreneurs. I know for sure that in other countries it is not easier in terms of doing business: they have their own monopolies, difficulties in obtaining licenses - there are a lot of questions. We actually have a lot of problems, but in general the conditions are quite comfortable.
- What is the most painful problem that you faced when you re-engaged in business?
- So far, there is no such problem. I was engaged in business for a long time before the civil service, I was ready for anything, I do not see any big problems. Well, this is our life, our country - of course, sanctions are imposed, some political consequences ...
- Do you feel them - the consequences of the sanctions?
- We do not feel - in fishing. We have never been admitted to big money, we have never had big benefits from the state. Therefore, we live as we live. With regard to access to financial resources, all credit rates are the same.
“But they have grown as a result.
- Of course, we have grown, what to do. We cannot do anything about it, we must live in such conditions.
- What does the Pacific Investment Group you created do?
- Our private investment group manages funds that we create for projects in the Far East. My main task is to invest in the Russian Far East. One of these areas is the fishing industry. Today we are also considering projects in the field of water and gold production, building a port, looking at other transport projects in the Far East.
- What do you mean by water extraction?
- We won a tender for the extraction and production of mineral water in the Primorsky Territory - the Glukhovskoye deposit.
- Will you produce branded bottled water?
- Yes, this is very interesting water: it is both medicinal and dining water. We will pour it. Maybe we'll even make a balneological resort, we'll see.
- What other areas for investment do you have?
- Gold. Gold mining.
- Do you have a deposit?
- Yes, in the Khabarovsk Territory. Now we have bought a deposit together with partners. While we are working on the project, until it is finally agreed.
- What is the total size of the group's investments, what is the size of the funds?
- We have three funds, which we will draw up on paper. One fund - $ 100 million, the second - $ 300 million, the third - $ 1 billion. They will be allocated for investment projects in the field of fish farming, transport, ports ... Now we are doing an interesting project in Nakhodka, we are planning to re-equip the port for transshipment and processing of oil cargo in order to providing bunkering for the Russian fishing fleet. Our main task is to invest in the Russian Far East, we are only doing this.
- And who are the investors in the Pacific Investment Group?
- Basically, we have Russian investors - private, there is money from large vertically integrated companies.
- That is, it will be the money of the companies? Are they expected to invest in industries related to their core business?
- No, the principle will be regional - the Far East. Telecommunications will invest in fish, for example.
- Why should companies invest in non-core assets?
- And these are not companies [will invest], these are people, the owners of these companies.
- In what will the largest of the announced funds invest - $ 1 billion?
- In logistics, for example. Cross-border logistics, including projects related to the free port of Vladivostok. Now, together with our partners, we are conducting a preliminary assessment of the planned investments. First of all, for cross-border trade, as well as gold.
- So you will be the largest private investor in the region?
- Not yet.
- But after you implement all these plans ...
- And then we'll see, we'll see.
- But do you have such ambitions?
- And I can't do anything else, except how to invest and develop the Far East.
- So you don't plan to invest in other regions?
- No, my specialty does not allow me. (Laughs.)
- Are you interested in the gambling zone in Primorye?
- We are considering the issue.
- Are you considering the creation of a new gambling zone operator?
- No, we can only invest in an existing operator. This is not our core business. But since we believe that this will work in the Far East, we will consider investing in this area.
- You have long owned the Nakhodka base of active sea fishing. Where is the company now?
- Nakhodka base is a public company, it has been paying dividends over the past 12 years. It is profitable, and it is one of the most stable enterprises, probably not only in the industry, but also in the country. Profitability is kept at the level
- And what are your targets this year?
- We need to estimate ... I think the revenue will be
- Several years ago they said that you are looking for a strategic investor, that you generally want to get out of this asset, the names of potential buyers were named - Gleb Frank, Gennady Timchenko.
- The fact is that I have not been in business for 11 years, because I was engaged in government work. And the enterprises in which I previously took part, developed as best they could, without my participation. Developed quite well. Our strategy today is to create a large holding, which will include enterprises from various sectors of the fish industry. Therefore, there is no question of selling our asset. On the contrary, we are looking at what new investments in the fishing industry we could make.
- Are there any strong players who could significantly improve your asset portfolio?
- Of course there is.
- Who, for example?
- I can't say, negotiations are underway today, we are constantly buying something.
- Describe at least their specialization - is it fishing, processing?
- It's red fish, coastal fishing, aquaculture. We will participate in all auctions to be held by the government. First of all, these are crab auctions. We will increase our role in this sector of the economy.
- What investments do you have in the fish business, what are your plans?
- We have traditionally been engaged in fishing in the Far East. Among the companies that are engaged in various types of fishing are PJSC "Nakhodka Base of Active Sea Fishery", LLC NPKA "Nereida", LLC "Ruskor", LLC "Dynamo-fish" and other fishing companies of Sakhalin and the Kuril Islands. This includes ocean fishery, a company in the field of aquaculture, it grows scallops, sea cucumbers. There is a company that catches and processes red fish on the coast on Sakhalin. Big holding.
We have long-term plans. This is the extraction, processing and production of finished products with high added value, so that all this added value remains in Russia. Second, we try to sell fish products in our country as much as possible. Today it is about 50% - a fairly large figure. The remaining 50% is the export of high quality products manufactured at sea with high added value to China, Japan, the countries of Southeast Asia, as well as to several countries of the European Union.
Now the industry is counting on further development with the help of the state as well. First of all, it is necessary to build a new fishing fleet. It is impossible to do this independently, by the forces of the industry. All countries of the world subsidize such projects, and we also expect some support from the state. Not even money, but support. We want to start building large-capacity trawlers and want the first two vessels to be ordered by the state for our science.
- Why does the state need these trawlers?
- This is necessary to study what is happening with fish in the oceans. We have always been among the world leaders in this type of scientific research. And this also helps fishing. And if we do not have such vessels, then there is no data [about what is happening with the fish]. And as a result, there are such punctures as we have this year on Sakhalin: red fish, pink salmon, came up - and did not go. And no one can understand why she did not go to our rivers. And if effective research were done in the World Ocean, we would know this process.
- Do you already have any agreements with the state on these first two trawlers?
- We would like to build ships at our shipyards. Today, 60 percent of ships are made up of foreign components. And so we have a lot of problems in shipbuilding. And we are looking for how we can do it so that both build a good fleet and do it in Russia.
- That is, the contracts for the first two trawlers have not been signed?
- Now we are studying the shipyard. But absolutely all fishermen, all the first companies approached this. Our country is called the country of wild fish catching. But now all countries of the world are investing in aquaculture, and we only have 1% of investments in it. The main problems here are not even in money, but in the administration of this business. It is necessary to play auctions for the provision of aquatic areas for aquaculture, which for three years have simply not been put up for auction for one reason or another. Three years have passed since the last auction for the plots that we need to grow this fish. And then another seven years have to wait for the results! We have already passed 10 years. And in China, 90 million tons of aquaculture fish are grown! 90 million tons! So that's it.
- Are your aquaculture projects being carried out within the framework of the Nakhodka Base or in the Pacific Investment Group?
- In an investment group. We have been doing this for a long time, these are new, modern technologies.
- Are these companies with plots for aquaculture that you are buying?
- Yes, but, unfortunately, there are very few of them. We cannot actively develop. And again, here we have a failure in the scientific part. We are forced to independently study the world experience "on the ground" in order to start production of this aquaculture - trepang, scallop. We are now exploring the possibilities of breeding a crab.
- How many plots for aquaculture do you have now?
- We now have only 5000 hectares of land.
- What is the volume of your investment in the purchase of these sites, companies?
- Investment amounted to about $ 40 million over about four years. This is significant enough. And we need to wait another three years until payback. These are such long projects. But, what is important, these are just the most effective projects in the Far East. Why? They consolidate the population on the territory, especially in coastal areas. This is the creation of new jobs and tax revenues to the regions. These are the most effective projects for the state.
- And what is the effectiveness of these projects for you?
- For us, this is a long-term investment, which - we assume - will pay off in a few years. These are investments that we make from the profit of enterprises in the field of traditional fishing.
These are new technologies, and we can quickly catch up with countries in aquaculture, stepping over a step and immediately entering the world markets where they are waiting for us. Because our seafood is better - we will have semi-wild trepang.
Unfortunately, we have another problem: not all coastal quotas are processed onshore. A lot is caught by ships and exported abroad. And we need to make sure that this fish is processed at our fish processing plants. Kamchatka is working a lot in this area, Sakhalin and Primorye are lagging behind - because [they have] fewer opportunities, but the construction of fish processing facilities is a very positive trend.
With regard to industrial fisheries (oceanic), in this case, processing is expected on ships or floating factories.
- Do you have projects in this area?
- Yes, of course, we have built three fish processing plants on Sakhalin. And we want to invest in the Kuriles, Iturup Island. We will develop this island, its southern part. We want to build a fish processing and fish breeding factories there, as well as enterprises for the cultivation of mariculture. We believe this is promising. But, again, there are the same problems - the lack of fish breeding grounds. We will ask that we get them there.
- What is the approximate size of investments for the Iturup project?
- We assume that investments there could amount to $ 30-40 million during
- Your old asset is the Primorye Bank. How do you assess his condition, who are his main clients?
- The bank has been on the market for 25 years, it is a local bank. His clients are mostly local businesses and individuals who know him well. The bank's advantage is that its management makes quick decisions on customer issues.
- Do you take part in the management of the bank?
- I do not participate, I only became a member of the board of directors two months ago, before that due to my work I could not participate. Now I help the bank to develop due to the fact that we have a lot of innovations in the banking sector. Naturally, all this affects the work of any bank.
- What exactly do you mean by innovation?
- I mean banking regulation, new more stringent requirements and standards, etc.
- How much is the bank tied to your other companies? Maybe lending them?
- The entire loan portfolio of our Pacific Investment Group is in Primorye Bank, which is about 300 million rubles. We take the rest of the loans from other banks
- Is there a desire to strengthen this asset by buying, for example, some other local player in this market?
- Such proposals are constantly coming. But before that, I did not have time to study, but now we are considering the possibility of increasing the volume of either the bank's business or the authorized capital.
- So you can attract a strategic investor to your bank by increasing the authorized capital?
- May be.
- Who might be interested in this? Regional or federal banks?
- Federal. There are conversations, but it is more like probing the ground. We do not have a task to sell the bank or merge with someone. But if there is a super offer, then we will consider. But so far there are none.
- Let's talk about politics. They say you have a tense relationship with the Sakhalin governor.
- [Oleg] Kozhemyako? I don't know about tensions, but our first investment was in Sakhalin. I met with him, we are familiar families, we have good relations, we have known each other for 30 years. I understand him, he understands what I am doing. We have a fairly comfortable relationship. Another question is that there are certain restrictions in fishing, but the governor behaves comfortably in terms of business support, openness, etc. What we have done in Sakhalin is an example.
- And what is your relationship with the new governor of Primorye Vladimir Miklushevsky? Does he have any questions, for example, about your activities as governor?
- There are no questions.
- How is your interaction built?
- Not being built in any way. I have no questions for the current government, the current government has no questions for me. I go about my business, I don't bother anyone.
- And there were no questions, did not interact in any way?
- No. And there was no need.
- You don't know Miklushevsky?
- Why, we know, worked together before. But there are no questions for discussion, because everything is decided. In our country, everything is resolved in different ways: there is a federal level for resolving issues, there is a regional one.
The article was published in the Vedomosti newspaper on September 15, 2015 under the heading “I can only invest and develop the Far East”.