KSG Agro signs memorandum with Chinese firms on drip irrigation

KSG Agro (KSG PW) signed a memorandum of understanding with a series of Chinese companies on cooperation in farming efficiency, the company reported on September 23 through mass media. KSG Agro is currently working with its Chinese partners to install a drip irrigation system on 3,000 ha of its land in 2014. The Chinese partners will finance the irrigation project and will receive a priority right to buy KSG products, according to Latufundist.com media.

Alexander Paraschiy: The irrigation projects initiative on KSG’s land bank, which is located in dry regions, is a good move, while so far it’s hard to say whether these projects will be successful. In particular, among the key risks that need to be considered is infrastructure, including the availability of water supply in the location. The company failed to inform shareholders on this deal via press release or exchange report, implying it’s far from being concluded.