Russian carmaker AvtoVAZ to spend millions on vegetable plan

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AvtoVAZ, Russia's leading carmaker, plans to allocate 1.2 billion rubles ($38.9 million) for the growing of vegetables at its headquarters in south Russia.

AvtoVAZ, Russia's leading carmaker, plans to allocate 1.2 billion rubles ($38.9 million) for the growing of vegetables at its headquarters in south Russia.

AvtoVAZagro, one of AvtoVAZ's many non-core assets, will reconstruct a greenhouse complex covering three hectares near the carmaker's home-plant in Tolyatti in 2011-2012, the Vedomosti newspaper reported on Wednesday.

While AvtoVAZ is set to sell off its other non-core assets, AvtoVAZagro is here to stay, the company's vice-president Polina Grishina said earlier this year.

But experts are skeptical as to whether going green can bring in the green.

AvtoVAZ's move to invest in the agricultural sector while trying to sell its other non-core assets "looks strange," analyst Yury Matevosov said.

The reconstruction of one hectare of greenhouses costs up to 1.5 million euro ($1.9 million), so you can't really call this business super-profitable, the president of the Greenhouses of Russia association, Viktor Semyonov, said.

AvtoVAZ has been the biggest winner of Russia's cash for clunkers scheme, launched in March, which gives motorists trading in old cars 50,000 rubles towards the purchase of a Russian-made auto.

 

MOSCOW, September 22 (RIA Novosti)

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