Russian pork companies are taking advantage of the market conditions resulting from the country’s ban on imports from many of its previous sources to make significant investments in their pig meat production and processing capacity.
Growth for Rusagro
Announcing its most ambitious plan to date, ROS AGRO Group (Rusagro) is to begin construction on a new project in Primorye in the coming months at an estimated cost of RUB17 billion (US$270 million). The investment includes a production facility for 300,000 tons of pigs, a feed mill and slaughterhouse.
Just one month ago, the company announced the opening of a new slaughterhouse in Tambov with a capacity of 2 million head per year and including deboning and the production of products for the retail market.
By 2018, Rusagro expects to build another pork complex with a capacity of 120,000 tons in the region of Tambov at a cost of RUB20 billion (US$320 million).
One of the leading producers of sugar, margarine and pork in the Russian market, Rusagro recently reported a 17 percent increase in revenue from its Meat Division in the first half of FY2015 to RUB8.48 billion (US$140 million) although second-quarter sales were 6 percent lower than in 2014.
Cherkizovo expansion project
Meanwhile, Cherkizovo Group has announced that it is to receive RUB14.4 billion (US$230 million) from Sberbank CIB for a major investment project in a new pig breeding facility costing a total of RUB19.2 billion (US$310 million).
The project, to be completed in four stages, covers the building of new pig farms in the regions of Voronezh and Lipetsk regions for 46,000 sows and the capacity to process 145,000 tons of live pigs annually. The company says this expansion will increase its capacity to raise pigs by 70 percent to 330,000 tons per year live weight. Securing its leadership position as the largest producer of meat products in Russia, Cherkizovo’s overall meat production will be raised to more than 1 million tons per year.
In the last month, Cherkizovo Group purchased another pork complex in the Lipetsk region with breeding facilities for 2,500 head of pigs for RUB250 million (US$4.5 million).In its latest trading results for the first half of 2015, Cherkizovo Group reports sales for its Pork Division down 9 percent to 74,379 tons live weight, which it attributes to the closure of two of its finishing facilities due to outbreaks of African swine fever in December 2014. The average price of its pork sales was 17 percent higher at RUB103.37(US$1.66) per kilo. With increased sales of case-ready products and bone-in meat, sales by the company’s Meat Division were up 28 percent for the latest half-year at 81,755 tons, with the average price up 8 percent.