Russia's VTB plans to expand grain business and then exit - CEO

Kernel Holding SA

19/11/2019 09:33

By Tatiana Voronova and Katya Golubkova
    MOSCOW, Nov 19 (Reuters) - Russia's VTB bank  VTBR.MM ,
which is expanding in commodities in a bid to create a national
grains champion, will exit the sector once it has built up the
assets in the next few years, its CEO told Reuters.  
    Andrey Kostin also said in an interview that VTB plans to
start trading wheat via its Swiss operation and that it is in
the final stage of talks to purchase half of the Taman grain
terminal on the Black Sea.
    VTB, Russia's second largest bank, is now a major physical
grain exporter after buying a local grain trader in August, and
became the largest operator of Russia's grain export terminals
and other infrastructure this year.  urn:newsml:reuters.com:*:nL5N25U0I5
    "Oil is going to run out one day but not the grain," Kostin
said in the interview, conducted last week and authorised for
publication on Tuesday. "With that in prospect over the next few
years, while the business is being built, we will still act as a
player in the grain market."
    In June the state-controlled bank asked President Vladimir
Putin to help it create a Russian grain champion to curb the
role of foreign traders and give the state greater control over
exports, according to a June 26 letter seen by Reuters. However,
Kostin told Reuters that once the business has been built up,
VTB plans to hand it over.  urn:newsml:reuters.com:*:nL5N25H4HR
    "We have not finished the expansion yet. We do not rule out
building new grain terminals in the Black Sea," Kostin told
Reuters.
    "After we consolidate and wrap up this business, we will
exit these assets," he said. He did not elaborate on the options
to leave the business or potential future owners. 
    In its letter to Putin, VTB said it would need another two
to three years to consolidate and acquire more grain assets. 
    The bank plans to start trading wheat through its "fairly
well-developed commodities trade business in Zug (Switzerland)",
Kostin said, adding that supplies to Russian traditional buyers
- the Arab countries and Vietnam - have been its main focus.
    VTB is also in the final stage of talks to purchase half of
the Taman grain terminal from Ukraine's Kernel group  KER.WA ,
Kostin said. Global trade giant Glencore  GLEN.L  owns the other
half of the terminal, located in Russia's part of the Black Sea.

 (Reporting by Tatiana Voronova and Katya Golubkova; writing by
Katya Golubkova and Polina Devitt; editing by Veronica Brown and
Susan Fenton)
 ((ekaterina.golubkova@thomsonreuters.com; +7 495 775 1242))