Scientific journal
European Journal of Natural History
ISSN 2073-4972

INVESTMENT PROJECT AGRICULTURE ORGANIZATION AS A BASIS OF MEDICINAL AND AROMATIC INDUSTRY IN RUSSIA

Pashteckij V.S. 1 Cherkashina E.V. 1
1 Institute of Agriculture Crimea; State University of Land
An important task at the present stage of economic development is to create a solid base for the production of medicinal aromatic raw materials. To solve this problem it is necessary to ensure investment in production of raw materials. For this purpose it is necessary to develop investment projects for agricultural organizations producing medicinal and aromatic raw materials.
investment project
medicinal and aromatic production
1. Cherkashina E.V. Economics and Organization of rational use and protection of land medicinal and aromatic industry. Monograph / E.V. Cherkashina. – M.: GUZ, 2013. – 284 p.
2. The site materials.URL: http://klepinino.crimea-ua.com.
3. Cherkashina E.V. Integration process Republic of Crimea in the Russian economic space as a stimulus for aromatic and pharmaceutical industry in the country // Modern problems of science and education. – 2014. – № 2; URL: http://www.science-education.ru/116-12776.

Invest-innovation project “Creation of production-scientific enterprise specializing in growing and integrated processing of essential oil crops in the Republic Crimea” corresponds one of the foreground lines of development of the agricultural sector in The Republic Crimea. This project is seen as a pilot project for the introduction of advanced technologies in the production of medicinal and aromatic.

The project envisages the creation of a complex for the production of essential oils and medicinal raw materials in the production cycle which includes the following steps:

  • Storage of planting (seed) stock;
  • Planting (sowing) campaign and care of the crops;
  • Harvesting of medicinal and aromatic crops;
  • Preparation of medicinal and aromatic raw material for processing;
  • Processing of raw materials to give the corresponding products.;
  • Storage and realization of the products [1].

According to the conditions of realization of the project and having regard to the task to process raw material maximum efficiently (wastefree) the following lines of using of investments are intended:

1. Formation of planting material according to a schedule of sowing campaign based on two year period of development of sowing fields (475 hectare).

2. Carrying out capital repair and reconstruction of the existent industrial and administrative premises as well as building an additional production facility made of easy-constructed unit constructions for processing roses.

3. Purchasing of agricultural equipment for carrying out sowing and planting compaign and harvest.

4. Organization of pre-plant cultivation of the soil and carrying out sowing and planting campaign of the first cycle (the first laying of plantations) paying attention to the fact that profit is not going to be formed in that period. The second and the following cycles of sowing of crops will be put into effect within the framework of economic activity of enterprise.

5. Execution of design works around the enterprise in general and around the complex of processing. The design works provide developing documentation for building new facilities, plan of placement of production lines and their packaging, execution of design works on setting and binding the main production equipment, organizing procurement and storage facility.

6. Purchasing basic process equipment, node points and installation, constructing and assembling of production lines, subsidiary objects, admission of service lines, carrying out startup-setup operations.

7. Inputs connecting with implementation and putting into production.

8. Currant capital formation of the enterprise.

In the framework of the whole complex the Project provides creation of self-contained cycle on growing and deep processing of essential oil row materials into different kinds of products such as essential oils, bio-extracts, toilet water, pharmaceutical medicine as well as supplements for cattle.In the framework of realization of the project it provides reaching planned capacity of production caused by both high level of work content connected with planting seedlings and with the long term of growing of some crops till the first harvesting.

In the Table 1 consolidated information about the lines and capacity of investing expenses in the framework of carrying out the project of creation of pilot production on processing of essential oil crops is presented.

According to the state document of using the land on August 2013 the PF “Crimea Rose” owns 2072 hectare of land. The land is given for scientific researches and productive activity. According to the Agreement about joint-cooperation from 6 April 2010 y. a part of the land was given to a private enterprise LLC “Agroproject “Troyanda Nova” (Lugansk city). For the period of 2013y. there was 1086,0 he. covered by crops. This way the PF “Crimea Rose” owns 553,2he of lands that are not used this time [2].

While realizing the project the following economic and social activities are intended to achieve which are presented in the Table 2.

Table 1

The lines of investment and capacity of investment

Investing expenses item

Capacity of investment

Thousands of dollar USA

General crop complex total, including.:

1 499,0

– purchasing of planting stock

753,0

– purchasing agricultural equipment

601,0

– expenses on planting crops

145,0

Processing complex total, including.:

2 412,5

– expenses on drafting and put into operation

120,0

– civil and erection works and repairing works

470,0

– purchasing main productive nod points and aggregates, subsidiary subjects and materials

1 252,5

– expenses on installation and commissioning works

400,0

– finances (current capital)

170,0

total investing expenses

3 911,5

Table 2

the main activities of economic and social efficiency of the project

An activity

unit of measure

1 year

2 year

3 year

4 year

5 year

6 year

total

Profit from realization

Thousand dollars

456

2 019

4 070

4 720

7 956

5 204

21 429

Net profit

thousan. dollars

–116

366

1235

1430

1505

1582

6002

Profitable work

%

22

36

36

36

36

28

Creation of working places with increasing result

unit

47

55

58

58

58

58

58

Significant increase in production capacity of medicinal raw materials and essential oils with high quality and reasonable price enable displace imports and increase export potential significantly. Implementation of the project will influence on the social development of the region in the best way.

Investing efficiency of the project was analyzed by calculating of the activity of net present value of the project (NPV), internal rate of profitability (IRP), a term of recoupment and a present term of recoupment of investments on the measures specified in this business-plan and the index of profitable inputs. The results of this calculation is presented in the table below. Discount rate was accepted on the level of 10 % (an average deposit rate is 5 %, as well as perils of decreasing of a level of profitability are 5 % in the project).

Table 3

A consolidated table of activities of efficiency of the project

An activity

Units of measuring

Value

A period of recoupment

year

4,7

Discount period of payback (DPP)

year

5,4

Net present value of the project (NPV)

thous.dollars

1639

Inner rate revenue(IRR)

%

22

Profitable index of inputs (PI)

unity

1,46

Revenue of investments (ROI)

%

17,6

The project has enough level if inner rate of revenue that is 22 % that exceeds discount rate more than two times. As it becomes clear from the table the project is effective, implementable and attractive for investments.

Table 4 presents data on volumes of production of medicinal and aromatic raw materials in Crimea. It should be mentioned that the given structure of sowing areas and gathering essential oil row material remains without any changes during last years.

Table 4

Production of essential oil raw material in ARC in 2012 year [3]

A name of region

Name of production

totaly

sage

lavender

coriander

rose

others

Total area

Production, t

Area, he

Croppage, t

Area, he

Croppage, t

Area, he

Croppage, t

Area, he

Croppage

Area, he

Croppage

total

fertile

total

fertile

total

fertile

Bakhchisarayskiy

285

129

110

318

318

439

25

25

12

153

148

771

710

Belogorskiy

381

108

1062

1272

1040

814

1629

650

60

30

36

3343

2562

Dzhankoiskiy

647

195

647

195

Kirovskiy

182

182

1

728

635

910

636

Krasnogvardeyskiy

98

30

67

414

414

178

3288

1942

25

1

3825

2186

Krasnoperecopskiy

542

137

542

137

Leninskiy

276

164

276

164

Nizhnegorskiy

2116

2086

2116

2086

Pervomaiskiy

665

194

665

194

Sakskiy

587

445

594

447

Simferopolskiy

374

374

841

291

291

279

1072

523

16

16

1482

1643

Sovetskiy

1208

1157

1208

1157

Chernomorskiy

171

171

75

25

15

196

90

Alushtinskiy pl.of es.

107

107

32

32

141

32

Totally

1138

641

2080

2755

2523

1818

12758

8128

133

71

48

203

164

16716

12239

Basis for successful production are::

  • natural-climate conditions;
  • technologies;
  • culture of production, professional skills of a producer.

Those producers who own more advanced technologies have considerable advantages and higher rate of profit over the rest.

Currently Crimea has all three components for quality medicinal and aromatic raw materials. Natural-climate and soil conditions are very favourable for it. On detritus and marly soils where crop capacity of cereals 6–7 che and crop capacity of lavender is 40–50 che, sage – 60–70 che. Besides that so rare essential oil plants as rockrose, rosemary, gumweed and some other plants that can be cultivated in the framework of planned enterprise are grown only in the Crimea.

Our country only on the Crimean resources may be the world´s largest producer of essential oils and medicinal herbs.