Creativ Group invests USD 20 mln into soybeen plant in Kirovohrad

Creativ Group (CREA) plans to invest USD 20 mln of its own funds in a USD 39 mln soybeen processing plant in Kirovohrad, with the remaining financing coming from unspecified Russian partners, the head of Creativ’s administration Yuriy Davydov said yesterday in an interview with Delo. Creativ will retain a 51% share in the venture. The plant is expected to begin operations in September 2009 and will have a daily processing capacity of 500 mt. Andriy Gostik: The news is clearly positive for the stock. If not for the latter’s low liquidity, it could visibly push the price up. According to the company, launch of the new soybeen processing plant in Kirovohrad together with the launch in early June of a new sunflower oil extracting plant could add nearly USD 160 mln to the company’s top line, making up for annual sales of USD 350-360 mln. However, we are inclined to believe that the plants will hardly reach full capacity shortly after launch due to the effect of the economic downturn on demand. We think that a more reasonable estimate of the oil extractor’s top line in 2009 is USD 300-315 mln, which is close to the lower bound of the management’s estimates.