The expert named the size of the land bank, which allows the agricultural producer to be effective
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Since 2000, the Ukrainian agricultural sector has not been unprofitable for a single year, and its average profitability was about 20%. Even during the war, it turned out to be profitable, although the exact profitability has not yet been calculated. Roman Sazonov, CEO of the asset management company SI Capital, said this at the Invest Talk Summit investment conference.
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To be highly effective, agricultural companies should own a land bank of 5 to 10 thousand hectares, notes Sazonov.
“To purchase 1 thousand ha, about $3 million is needed. At the same time, taking into account the costs of equipment, administrative costs, the need for an elevator, you will not be able to work effectively on such a plot,” he says.
Profitability growth potential
Every year, the agricultural sector will demonstrate the best results, because the soil allows to increase the yield.
An important factor should be the introduction of precision agriculture technologies. “A few years before the full-scale invasion, it had already begun to develop in our country. After all, agricultural producers reacted to the increase in fuel and fertilizers and understood that they need to be used more efficiently,” Sazonov noted.
The main problem now faced by domestic agriculture is the difficulty of exporting agricultural products through the Black Sea ports. “Until it is resolved, farmers will receive a lower profit, because the price of agricultural products is low, and there is practically no correlation with the price on world markets,” says the expert. In his opinion, the problem of sea exports will be solved this year.
Read also: Where to invest $100 thousand: 5 options for portfolios — from risky to conservative
About Invest Talk Summit
On May 27, the Invest Talk Summit investment conference was held, organized by the website of the Ministry of Finance with the support of the Academy of the Ministry of Finance and Finance.ua.
The conference was attended by investors, owners of leading Ukrainian companies, managers and experts in the field of finance. They discussed the current situation in the economy and forecasts of its further development, as well as gave their recommendations on investments in the real estate market, cryptocurrency, balancing the investment portfolio, etc.
Access to the full speech of Roman Sazonov and other Invest Talk Summit participants can be purchased here.
Source: Ministry of Finance
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