Russian meat producer OJSC Cherkizovo Group is to increase pork production capacity, it has today been announced.
The company said it has begun the construction of two new greenfield pork farms in the Tambov and Voronezh regions of Central Russia. The company said the investment is expected to reach US$110 million, of which approximately 20% will be funded by Cherkizovo and the remaining approximately 80% by bank loans.
Sergey Mikhailov, CEO of Cherkizovo Group, said: "The Company is very pleased to be continuing its successful investment in its high margin Pork business. The Russian pork market remains highly fragmented; only 53% of production is on an industrial level, while greenfield production is even lower. Our preference for greenfield construction allows us to build highly efficient new farms that meet modern international standards.”
Mr Mikhailov added: “Our leading position in Russian pork production is supported by our investments into greenfield pork farms in Lipetsk and Tambov, as well as the acquisition of new pork farms in the Penza and Lipetsk regions. Our new greenfield constructions in Tambov and Voronezh will further develop our market leadership and significantly contribute to Russia's national food security supply programme. The Pork segment has great potential in terms of domestic supply and import substitution, as well as in the opportunity arising from the increasing share of pork meat in total meat consumption. Government initiatives to support domestic production are playing an important role in the development of the agricultural sector, and the continued implementation of such measures will help to ensure sustainable increases in productivity.”
“We will continue to rapidly develop our Pork business and will work to realise the potential of our other segments. We see significant opportunities for Cherkizovo Group to leverage its scale, vertically integrated structure and operational efficiency to further consolidate the Russian meat market.”
The farms will house 4,800 sows and will each have an estimated full capacity of 12,500 tonnes of live-weight pork per year. The plans for each complex include separate breeding, rearing and fattening facilities, equipped with state-of-the art technology. The farms will be populated with our own parent stock, using sows from the high yielding and efficient pork breed, DanBred.
The company said it plans to launch the new sites' breeding facilities in the first half of 2011 and the rearing and fattening facilities will become operative during 2011. The complexes are expected to reach their full combined capacity of 25,000 live-weight tonnes by the end of 2012. The group's overall pork production capacity in 2012 will total an estimated 140,000 tonnes per year.
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