Azerbaijan, Baku, Dec. 18 / Trend U. Ismayilova /
Azerbaijani Investment Company (AIC) and German companies RAO Agro Milk and RAO Global Group signed the memorandum on understanding envisaging construction of Agstafa dairy complex and agro-service in Baku today.
The memorandum was signed by the AIC executive director Afgan Isayev from Azerbaijani side and RAO Agro Milk and RAO Global Group executive directors Fritz Hostmeister and Vyacheslav Afanasyev.
Isaev said that construction of enterprises will begin in the first quarter of 2010 and complete in the first quarter of 2011. Both companies will be located in Agstafa region. The dairy complex including four farms will be situated in the village of Boyuk-Kesik, but the agricultural service - in the village of Samad Vurgun.
According to the project, the power of the dairy complex will be 50 tons of milk per day. In the first two years of activity, the company will produce five types of sterilized milk, yogurt, sour cream. In general, during the year more than 18 million liters of dairy products are expected to be produced. Livestock is expected to be developed to get milk, meat.
Purebred animals are also expected to be breed. In the third year of the complex butter and other products will be added to the range of products produced at the enterprise.
According to calculations, annual demand of dairy complex in feed for livestock is expected to reach 65,000 tons, 95 percent of the feed will be produced in the complex. About 2,700 hectares of land has been allotted to the complex for these purposes.
"Establishment of a dairy complex will play an important role in the production of high quality milk and dairy products according to European standards", Isayev said.
According to the primary calculations, the total cost of construction of the complex is estimated at 30 million euros. Primary share capital of the company will amount to 5 million euros, 4 million euros falls on foreign investors. The AIC share will hit 20 percent in the authorized capital of the complex.
The cost of establishing Agstafa's agroservice is estimated at three million euros. The authorized capital will be formed at the level of one million euros, with the AIC share holding of 25 percent.
This venture will render agro-technical services in Agstafa and surrounding areas.
The AIC head said that loans will be drawn from European banks and governmental agencies to realize these projects.
"Sources of funding will be specified after a business plan of the projects are worked out. It is expected by late 2009. After developing the business plan will be agreed with the German side," Isayev said.
Establishment of a dairy complex and an agro-service will provide 200 people with jobs.
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