Vladimir Dmitriev: “Creation of such production facilities guarantees food security and food independence for Russians”.

HOST: My colleague Sergei Batischev is going to tell us about import substitution with domestic products, he is now on the direct communications link from the Yaroslavl region. Good afternoon Sergei, we‘re listening to you.

CORR.: Hullo Olga. In fact, the decisions taken by the Russian Government won’t make it possible to keep Russian citizens on a starvation diet. We are now at one of the largest milk production complexes in Europe. It was built here from scratch in the open field for a period of 4 yearspartially with the money provided partially by Vnesheconombank.And Vnesheconombank Chairman Vladimir Dmitriev is now with us on the direct communications link. Good afternoon Vladimir Alexandrovich.

Vladimir DMITRIEV, Vnesheconombank Chairman: Good afternoon.

CORR.: Vladimir Alexandrovich, would you tell us about what has been built here with the money provided by your Bank?

Vladimir DMITRIEV: Now we are at the first milk production complex. In total, we have funded two such complexes, with their total value being about 6 billion rubles. Two more complexes were laid down. All in all, there will be 8 complexes. Besides milk production facilities, there will be a feed-processing plant and a milk-processing factory. We are happy that here milk production per cow indicators are in line with the world’s standards – here an average daily milk production per cow is about 32 liters and some top-performing cows produce more than 60 liters per day. Basically, it is a unique milk production facility. The director of this complex said that in 2008, when they started to build the complex there was an old farm with 120 cows and the daily milk production per cow were at most 6-7 liters. It is important that this is a vertically integrated production facility. There are many complexes of this kind across the country including those funded by Vnesheconombank. So,creation of such production facilities guarantees food security and food independence for Russians”.

CORR.: Vladimir Alexandrovichlet’s talk about financial security because this security is very important especially for those who invest in such complexes. To what extent is it easy to invest in such complexes in Russia using among other things Vnesheconombank’s funds?

Vladimir DMITRIEV: This task remains as difficult now as it was in the past. First, the task is above all is to analyze a project’s economics and develop a sustainable financial model together with the project’s initiators. Second, an important task is that such projects require long-term money and favorable terms and conditions so that a product’s value at the time of production could compete with that of a similar product imported from abroad. There is no doubt that in the current situation, when Western countries have imposed embargo on long-term lending to key Russian banks with state participation we have to raise domestic loan facilities. And in this respect, we are working with the Government,the Finance Ministry, the Economic Development Ministry and with the Central Bank, they can understand our problems and are ready to provide us and other banks with state participation with long-term ruble facilities.

CORR.: Have any decisions been made in this respect?

Vladimir DMITRIEV: It’s important for us that a decision has been made to additionally capitalize Vnesheconombank. We hope that basic technical tasks will be addressed in the near future. This will enable us to ensure further sustainable development and maintain required capital adequacy ratio. Now we are also discussing with the Government other measures of the state’s support.So, we don’t have to worry about Vnesheconombank’s finances and its readiness to fund this kind of projects as well as about the stability of the financial system as a whole. Although there is a certain tension, we’ll be able to defuse it.

CORR.: Vladimir Alexandrovich, Could you be more specific about an additional capitalization because the question was raised last autumn and there were plans to use monetary resources of the National Wealth Fund. Was a decision made to go ahead in this way?

Vladimir DMITRIEV: Yes, it was. They enacted appropriate amendments to the law. Certain decisions are to be made now by the Government. We hope that in autumn deposits of the National Wealth Fund will be converted into tier 2 capital.

CORR.: Very well. Thank you very much Vladimir Alexandrovich.