PAVA consolidates new businesses under GlobalAgro holding

PAVA, Russian grain processor with a strong standing on the milling market, expands into high value-added businesses and grain growing. The company has started two new projects, planning to finance them partly through outside equity capital, and has altered its structure to promote optimal conditions for investment.

The Russian Agricultural Division and the Deep Processing Division (Grainvest) are consolidated under PAVA daughter holding GlobalAgro, which creates the basis for a stage-by-stage transaction. Within this framework, PAVA partners could invest either in a separate project, or the whole vertically integrated holding company.

Economically, the underlying idea was to improve business profitability. Millers often have to deal with rapidly changing grain prices, while co-ordination of the whole chain from crop growing to processing means resistance to market fluctuations and capturing additional margins. Furthermore, production of high value-added ingredients opens a completely new avenue for PAVA’s development.

"We have high expectations of the streamlined structure and anticipate strong international demand for the new range of products. Flour market now has limited opportunities for growth, and it was a timely decision to chart a new course of action and use our resources to the best effect", says Andrey Igoshin, PAVA President.