Cherkizovo plans to boost poultry production 40% by 2012

Leading Russian meat producer and processor Cherkizovo Group (RTS: GCHE) plans to boost poultry meat production 40% by 2012, the company said in a statement. 

Cherkizovo continues to boost capacity at its poultry operations in Penza region. That effort saw reconstruction of the Vertunovka poultry facility, boosting capacity to approximately 60 million incubatory eggs a year. 

Cherkizovo is also building an incubator in the region with capacity for 105 million eggs a year. The facility is scheduled to commence operations this fall. In addition, the company will add another 100 hen houses at the Vasilievskaya facility, including 57 this year, and a slaughterhouse able to handle 8,000 birds an hour. 

Project financing will come from internal sources and with a 2.5-billion ruble credit line from Sberbank Russia (RTS: SBER). 

The project will double production at Vasilievskaya to 120,000 tonnes of poultry (live weight) a year from 60,000 tonnes previously. 

Capacity in the Bryansk region is slated to rise to 63,500 tonnes of poultry (live weight) a year by 2012. 

Cherkizovo's poultry meat sales declined 2% to 184,300 tonnes in 2009. 

The company welcomes Russian government measures to reduce poultry import quotas and to ban importation of product processed with substances containing chlorine, General Director Sergei Mikhailov is quoted in the statement as saying. "We welcome that state policy, all the more so since it corresponds exactly with Cherkizovo Group's strategy to develop and expand its own production capacity at poultry facilities," Mikhailov said. 

Cherkizovo Group, which was formed in 2005, includes eight meat- processing companies in the Moscow region, Penza, Ulyanovsk, Belgorod and Rostov regions and Krasnodar territory, four hog complexes, two poultry farms and a feed plant. The company held an IPO on the London Stock Exchange (LSE) in May 2006 that raised $251 million.