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The Thai investor was sent to the Soviet Harbor

Leong Chi Chung, executive president of Sutech Engineering, talks about the implementation of the project to create a sugar factory in the Far East

The Thai company Sutech Engineering Co. Has highlighted its plans to create its own factory for the production of refined and ordinary sugar in the Khabarovsk Territory. Her subsidiary, the future operator of the project, is registered in Russia. Leont Chi Chung, executive vice president of the company, tells what further steps will be taken by the investor in the construction of the sugar factory.

The Thai investor was sent to the Soviet Harbor

- You have already completed the registration documents for a subsidiary of Sutech Engineering Co. in Russia. at the Federal Tax Service?

- Yes, and we have received approval from Russian tax structures.

- What is the name given to the subsidiary?

- LLC "Far Eastern sugar and derivatives plant".

- How much will the authorized capital of the enterprise be in rubles?

- At present, the authorized capital of the company is only 100 thousand rubles. But after the implementation of a number of relevant approvals, it should be increased to 30% of the total cost of the investment project for creating the plant.

- Who will act as the main shareholders and top managers of the company?

- The company will ultimately be owned by three organizations from ASEAN countries - by 80-90%. At the same time, there will be some balance between them and one or two Russian companies. The specific names of the project investors will be announced in due course. At the same time, the company has already been formed by now. But, nevertheless, it is still too early to hire and appoint her management level. Its formation will be carried out in due course in the prescribed manner.

- What should be the next steps in the implementation of the project?

- Now the company is in the process of applying for the project to receive the status of a Priority Investment Project of the Khabarovsk Territory, as well as documents for entry into the special economic zone of the port of Sovetskaya Gavan. At the same time, it is awaiting the requested approval from the federal authorities for the import of raw materials.

- When is your company planning to start design and construction work within the project?

- The preliminary design work for the plant has already been completed. Its further refinement will be carried out in the following months before the launch of the plant - certain orders for design continue to be gradually surrendered by service contractors and equipment suppliers. If all the necessary approval is received from the relevant government regulators, the company can begin construction of the foundation at the Sovetskaya Gavan port in the second quarter of 2017. In general, the construction of the entire plant will take about 24 months. 

- Earlier there was information that a land plot of 6 to 7 hectares would be required to create a plant. Are these numbers correct?

- We have calculated that the size of the initially proposed site is reasonable, but not sufficient to implement the long-term project plans. After that, thanks to the joint efforts of the company and the authorities of the Khabarovsk Territory, a more suitable place for the project was found in the region - a short distance from the first. Its area is already about 48 hectares, it is located within the developed territory of the special economic zone Sovetskaya Gavan. 

- How much will the total investment of the project be?

- The total investment of the sugar factory is $ 210 million, of which $ 150 million is capital expenditures and $ 60 million is working capital. 

- The data was sounded that the plant will produce 100 thousand tons / year of high-quality refined sugar, 350 thousand tons / year of ordinary white sugar, and 50 thousand tons / year of brown sugar of high quality. Are these the right intentions? 

- So far, the plans remain so. But here it is important to keep in mind that while we are still awaiting some permits from the relevant Russian state authorities. If there are restrictions on the supply of our sugar to the domestic market, then, in accordance with this, we can make some changes to the existing production plans. At the same time, we are now developing such plans for the plant's products with added value - sugar refined products. They will be announced in due course for investment at a later stage. It should be noted that permits from Russian government agencies may affect existing plans for the production of sugar-based products.

- Raw materials for sugar production will be supplied mostly from Asia and Australia?

- Yes exactly.

- Has the company already studied the market of the Far East and Russia as a whole?

- Yes, the company has already made a preliminary assessment of the sugar market in the Far East. To obtain more accurate data about it, specialist consultants will be involved. In fact, obtaining information about the sugar ranch is a continuous process, and not an action taking a certain period of time. 

- Where will you supply your sugar products and in what quantities?

- In the Far East, the demand for sugar is about 250 thousand metric tons / year. For its part, the company is ready to supply this entire volume. But we are awaiting the approval of the supply of all volumes of future products, or the establishment of some restrictions for them by the Russian state authorities.

- In this case, the sugar produced by your plant will be supplied from the Soviet Harbor to China, too, is not it?

- Yes, the export of the plant’s products is also planned to countries neighboring Russia, including China. Investigations of everything possible for the supply of products of the plant market are currently underway. 

- Your company will have to compete with such a regional company as Primorsky Sugar. How do you plan to work around it?

- We expect competition from the players already existing in the sugar market. We are confident that we will take our solid position on it. First of all, due to production efficiency, which is based on the use of the latest technologies in sugar production, efficient logistics, sales system and sales strategy.

- What price policy will your company adhere to?

- We hope that you sufficiently understand how delicate pricing is, and, therefore, realize that the pricing policy of the plant can only be finally formed as the project approaches the market stage of its implementation. At the same time, it should be remembered that, in the end, any pricing strategy should first of all be based on market realities, within which - take into account the sensitivity of consumers to product quality, the need for its effective distribution between them, as well as their quick response to any actions from competitors.

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