Astarta launches a 10,000 mt elevator

Astarta Holding (WSE: AST PW) launched a new silo facility with a storage capacity of 10,000 mt in Voytovtsy, Khmelnitsky region, the company reported on Wednesday in a press release. The management plans to increase the silo’s capacity 2.7x to 27,000 mt in 2011. Ruslan Patlavskyy: The launch of the Voytovtsy silo will increase the company’s ability to benefit from seasonal grain prices fluctuations, extending Astarta’s total storage capacity by 20% to 60,000 mt. This said, given our Astarta grain harvest forecast of 273,000 mt (-10% y-o-y) for 2010, the company’s total storage capacity implies grain turnover of 4.5x. We view this as quite high, given Mriya’s turnover forecast of 1.7x and Kernel’s (incl. Allseeds storages) of 1x for this year, and, thus anticipate a launch of additional 35-40k mt of capacity (in addition to the 2.7x Voytovtsy silo capacity ramp up next year) over 2011-12 to fully utilize the benefits of seasonal variability in domestic grain prices.