The Russian Agricultural Ministry has commenced work on a list of feed additives and enzymes that will be eligible for state subsidies under the industry development plan from 2027. There is no consensus in the industry on what additives should be subjected to state aid.
Under the existing plan, the government aims to increase the level of self-sufficiency in feed grade amino acids to 85% and in feed grade vitamins to 40% by 2030, Ekaterina Noskova, senior analyst with Feedlot, a Moscow-based think-tank, said.
As the government has promised state aid for import replacement in the feed industry, several companies have initiated investment projects for the production of feed amino acids, vitamins, and enzymes in Russia, some of which will focus on exports, Noskova added. However, “without government support measures, the implementation of any investment project [in the feed additive industry] is a difficult task - due to serious financial costs and long payoff."
Not everyone in the Russian feed industry agrees that all feed additives must be made eligible for the government subsidies. Russia has largely met domestic demand for lysine sulphate, partly with the help of Belarus’ BNBC, and subsidizing new projects could eventually enhance competition and harm existing projects, a source in the industry who wished to remain anonymous commented.
It's not the government's task to assess the economic feasibility of independent projects in the industry, commented Sergey Mikhnyuk, executive director of the National Feed Union, who believes that this sits more within the competence and area of responsibility of commercial initiators.
"This form of state support will find its addressee only if it fully understands what product with guaranteed local sales, in accordance with what proven technology, on what assembled and debugged equipment will be produced within the projected timeframes," Mikhnyuk said.
The situation with the import-replacement of feed grade vitamins is the most complicated, Noskova said.
"The volumes of consumption in Russia are currently not that high, and if you establish production relying solely on the domestic market, there is a risk that with the high costs incurred, the facility will not reach breakeven, so the issue of export supplies, in this case, is more pressing," she said.
For example, Noskova revealed that one investor is currently considering plans to build a vitamin B2 80% plant with a nameplate capacity of 2,000 tonnes/year, while domestic consumption is estimated at only 300 tonnes/year.
Mikhnyuk added that the payback period for investments into localizing feed grade vitamins at the stage of financial planning is unlikely to be clearly predictable.
