In October 2006, Prokon and the Kuban LLC Mostraps (founders – individuals) registered a joint venture Prokon-Kubanraps to implement the rapeseed plant project, Ivan Obukhovsky, deputy director of Prokon-Kubanraps, told Vedomosti. The German company owns 70% of the authorized capital of the joint venture. Mostraps acquired a land plot for construction in the Mostovsky District of Krasnodar Krai, and the German company will supply the technological equipment and carry out the construction work, Obukhovsky noted. An official of the Mostovsky District administration reported that Mostraps bought a land plot of 12.5 hectares.

The start of construction of the plant is planned for spring 2007, now the design documentation is being prepared, after which the project should undergo an expert examination, says Obukhovsky. According to Prokon Commercial Director Karsten Rotbertus, investments in the project will amount to 20 million euros. The plant will produce 50,000 oils per year. The rapeseed oil is planned to be supplied to Germany as a final product and used as biofuel, Rotbertus said. The meal will be sold to livestock farms in the Krasnodar Territory, Obukhovsky noted.

Head of the oilseed selection department of the All-Russian Scientific Research Institute of Oilseed Crops Sergei Gorlov says that 100,000 tons of oilseed raw materials will be needed to load the plant to full capacity, but so far there is a disproportion between the actual harvest and the needs in Krasnodar Krai. However, Obukhovsky believes that there will be no difficulties with raw materials: “In Krasnodar Krai, the area under rapeseed sowing has been increased, we will have enough raw materials.” The increase in sowing areas is also confirmed by an official of the regional department of agriculture. According to him, in 2005, rapeseed was sown on an area of 16,400 hectares, in 2006 on 30,800 hectares, the yield in 2005 was 17.5 c/ha. Winter rapeseed is also sown in neighboring regions - in Stavropol, Rostov and Volgograd regions. And Natalia Netesa, an expert in the Russian markets department at APK-Inform, believes that the trend to increase rapeseed sowings is nationwide. In 2006, rapeseed sowing areas increased by 120.8%, from 244,000 hectares to 538,000 hectares, she says, citing Rosstat data. Netesa predicts that the total gross rapeseed harvest in Russia will reach 516,700 tons (in 2005 – 302,700 tons).

European investors are increasingly interested in biofuel production projects in Russia. German companies Beo Obrigheim and Solido Projekt AG intend to build a rapeseed oil plant with a capacity of 25,000 tons per year in the Nizhny Novgorod region. Investments will amount to 15 million euros. In 2006, German companies Kai Runge and Malch & Parther GdbR reached an agreement with the Kurgan region administration on growing and processing rapeseed into biofuel in this region. Austrian company STC GmbH is considering the possibility of building an oil extraction plant for processing rapeseed with a capacity of 500,000 tons of seeds per year in the Krasnodar region, the regional administration reported. The investment volume is estimated at 15-30 million euros. It is assumed that rapeseed oil will be exported to Germany and Austria for processing it into biofuel at the company's plants.

Interest in such projects is connected with the active development of the biodiesel program in the EU countries, says Netesa. “The production of biofuel in itself, taking into account the new environmental standards in Europe, is already a highly profitable business,” says Vladislav Isaev, an analyst at Finam Investment Company. “And the possibility of selling waste – rapeseed meal – will increase the profitability of the enterprise.” At the same time, the price for the meal can be as low as desired, the meal can even be taken into account as part of the payment to rapeseed suppliers, and the enterprise will be freed from the problems of waste disposal, says Isaev.

Both schnapps and rapeseed