Structural changes in the Russian protected soil industry: consolidation of greenhouse assets


The Russian greenhouse business is gradually moving to a new stage of development. Mass construction of modern greenhouse complexes and increasing production of vegetables, green, mushrooms and berries in the protected soil over the past 5 years, has led not only to increased trade supply of non-seasonal fresh products, but also to a significant increase in domestic competition.

Decrease in the number of programs and volumes of state support for the industry in 2018 - 2019 quickly moved it to market conditions, which reduced the attractiveness for new investors, especially non-core ones. At the same time, the need to optimize production processes and reduce production costs for existing enterprises, improve the professionalism of staff and sales strategies became clear as possible ways to maintain viability in a competitive market.

Consolidation of greenhouse business in the form of mergers and acquisitions has started in the industry quite recently, but is rapidly gaining momentum. According to the results of Growth Technology research, large holdings with well-established production management systems and combined sales show generally better commercial and financial results.

A landmark event in the industry this year 2020 was the merger of the assets of two major greenhouse holdings in Russia: ROST Group and Dolina Ovoschey Group. The consolidation deal has not been completed yet, but according to its results, the used areas of greenhouses of 4 and 5 generations of the new Holding today exceed 220 hectares. By the end of the next 2021 (including the ongoing construction according to estimates of Growth Technology) will be about 300 hectares.

More details about the condition and prospects of the protected soil industry and the largest industrial greenhouses can be found in the study "Greenhouse business of Russia 2020".