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President of Russia Vladimir Putin: Mr Sergeyev, the United Grain Company is our largest enterprise in this sphere of activity.

United Grain Company Director-General Dmitry Sergeyev: Yes, this is the largest state-owned grain operator.

Vladimir Putin: The state owns a controlling stake in it, namely, 50 percent plus one share. You have an ambitious investment programme, and your earnings are growing. To the best of my knowledge, they soared by 62 percent last year and topped 100 billion rubles.

Please, go ahead.

Dmitry Sergeyev: Thank you, Mr President.

Thirteen years ago, you issued an executive order establishing the United Grain Company and listed it among strategic shareholding companies.

The company now operates various assets, including nine grain elevators with a capacity of 700,000 tonnes, three processing facilities with a total capacity of 500,000 tonnes of grain, as well as two port terminals with a total capacity of 8 million tonnes and 1,500 hopper wagons.

As you have already said, our 2021 earnings totalled 104.6 billion rubles or a 62 percent increase on 2020. The company’s net profits also increased, reaching 4.6 billion rubles.

The company’s main long-term strategic development goals include efforts to implement state support measures for agricultural producers, develop the export infrastructure and export agricultural produce.

I would like to brief you on these three aspects, if I may.

Vladimir Putin: Please do.

Dmitry Sergeyev: With regard to regulating the agricultural market, the company’s most important function has been and remains acting as an agent of state intervention. In 2022, the Russian Ministry of Agriculture is to purchase 1 million tonnes of wheat and 90,000 tonnes of sugar and allocate them to the intervention fund. Between now and 2024, up to 3 million tonnes of wheat and 250,000 tonnes of sugar are to be purchased and stored as part of the intervention fund.

The intervention fund is not just about the country’s food security. It helps producers and processing companies during years of drought and crop failure and it is used for humanitarian purposes as well. Also, it supports the elevator infrastructure and performs social functions.

Vladimir Putin: The bulk of the humanitarian aid is going through you, isn’t it?

Dmitry Sergeyev: Correct, through the United Grain Company, and we take it from the intervention fund.

The fund also performs social functions. With 3 million tonnes of grain stored at the intervention fund, about 100 elevators in 24 regions will be used, providing jobs for 10,000 employees.

Vladimir Putin: How many employees do you have?

Dmitry Sergeyev: 1,500.

The intervention fund performed at its peak in 2010 with 456 elevators and 35,000 employees engaged in the effort.

Vladimir Putin: The average salary is around 90,000, correct?

Dmitry Sergeyev: Yes. Our average salaries are quite good.

With regard to investment activities, the company has been implementing a major investment programme since 2019. The Novorossiysk Grain Processing Plant, which is a large deep-sea grain terminal on the Black Sea coast, is the company’s core asset. The investment programme will boost the transshipment capacity to 11.6 million tonnes.

Commodities exchange indexes are yet another promising area.

Vladimir Putin: Please, tell me in more detail how you intend to work in this area.

Dmitry Sergeyev: Mr President, in 2021, the United Grain Company (UGC) started online auctions at the National Commodities Exchange – with support from the Ministry of Agriculture and the Central Bank of Russia. In less than a year, they showed their effectiveness with trade volumes worth 15.6 billion rubles. This will be our domestic index; we will no longer use indexes from foreign exchanges like the Chicago Mercantile Exchange or the International Futures Market of France. I mean, this is promising and is working successfully, and much of the client base uses this exchange.

Vladimir Putin: Is wheat your basic exchange commodity?

Dmitry Sergeyev: Yes, only grain. These are grain, wheat indexes.

The company is also focusing on foreign trade. In 2021, exports amounted to almost 3 million metric tonnes. Our main goal is to fully bypass international trade mediation and work directly with the importing countries. Egypt is probably our main client. Over two agricultural seasons, we ranked highest among Russian exporters with 1.5 million metric tonnes of wheat.

Moreover, with our partners from friendly countries, we are transitioning to payments in national currencies. For example, we have signed several contracts with our Turkish partners. The latest of these, signed in March, is payable in rubles; the overall total will be about 3 billion rubles.

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