Evgeny Tugolukov
00:00 — 08.04.2021 / Releases

Don Agro enters into market for organic wheat amid evolving consumer preferences and rising environmental awareness

• Group allocates 11.0 hectares of arable land for the launch of its pilot project in organic wheat cultivation
• Leveraging on its capabilities in organic farming, the Group intends to capture growing consumer demand for organic alternatives that harness both health and environmental benefits
• Apart from generating new revenue streams, the successful sale of higher margin organic produce coupled with cost savings from the reduction of fertilisers and pesticides used will better contribute to earnings resilience and profitability for the Group 

Singapore, 8 April 2021 – Don Agro International Limited (the “Company” or “Don Agro”) and its subsidiaries (collectively the “Group”), one of the largest agricultural companies based in the Rostov region of Russia is pleased to announce that it is launching a pilot project to enter the global market for organic food. As part of this initiative, the Group intends to expand its range of products to include organically cultivated wheat to capture growing consumer demand for organic alternatives which will lead to both health and environmental benefits. Supported by a large land bank in the prime agricultural region of Rostov in Russia, the Group has allocated an 11.0 hectare plot to support this venture. 

Speaking on this latest initiative, Mr Ivan Kalaitanov, Chief Agronomist of Don Agro commented, “Our immediate plans for this plot of land will be to control the growth of weeds with the help of harrowing which involves the physical uprooting of weeds without the use of herbicides. Naturally occurring biological products will also be utilised for the crop cultivation process in place of pesticides or herbicides to control pests and diseases. We expect that these new organic wheat fields will be completely free of mineral fertilisers and pesticides by September 2021. Thereafter, winter wheat will be sown and grown on these plots without the use of any artificial chemicals. Official organic certification of our wheat crop will be completed subsequently as per the existing rules and regulations of the relevant governing authorities."  

Today, rising health concerns relating to the harmful effects caused by the presence of chemicals and pesticides in non-organic produce are one of the key reasons driving the demand and growth in the market for organic food. At the same time, the perceived health benefits and growing scientific evidence supporting these claims have resulted in larger groups of consumers moving to organic alternatives. Greater awareness of the environmental impact of conventional farming practices has also accelerated this shift. Due to these prevailing trends, the global organic food market has been forecasted to reach S$272.2 billion by 2027 or expand at a CAGR of approximately 12.2%1 , representing vast growth opportunities for agribusinesses in this space. 

Mr. Marat Devlet-Kildeyev, Chief Executive Officer of Don Agro added, “The sustainability of our operations remains one of our key corporate priorities. As such, we have embarked on this new initiative to ensure that our responsibilities to our shared environment are met. We believe that our latest move into organic production is a step in the right direction. Apart from the environmental benefits, the cultivation of organic produce will expand our suite of offerings and generate new revenue streams. Furthermore, the sale of the expected higher margin organic produce coupled with the reduction of fertilisers and pesticides required is expected to improve the earnings resiliency and profitability for Don Agro over the longer term. Looking ahead, our objective is to establish ourselves as one of Russia’s leading producers of organic crops where we see vast opportunities for growth given the prevailing market trends." 

Due to the burgeoning demand for organic wheat products in Russia, the Group’s initial harvests have been earmarked to be sold to local organic food producers. Over the longer term, the Group intends to increase its organic land bank to capture growth in the region through export sales.