Russia’s Cherkizovo reported an increase in sales volume for its poultry, pork and meat processing divisions for the first quarter of fiscal year 2016. The company released its quarterly sales figures on April 28.
First quarter sales volume for Cherkizovo’s Poultry Division increased by 19 percent year-on-year to 128,227 tons of sellable weight. The company attributes this growth to higher production levels and a management decision to sell excess inventory, given the lack of certainty that the summer sales price will be high enough to compensate for the added cost of storage.
The average price during the first quarter of 2016 dropped by 8 percent year-on-year to RUB88.62/kilogram (US$1.36/kilogram) due to oversupply in the market and consumers’ falling purchasing power. The average price also fell by 5 percent on a quarter-by-quarter basis.
Sales volume for the first quarter of 2016 increased by 7 percent year-on-year to 40,138 tons of sellable weight for Cherkizovo’s Pork Division.
The company says this was due to a new initiative launched at the beginning of the year to improve efficiency by increasing weekly farrows. The average price decreased by 16 percent year-on-year to RUB81.73/kg and by 4 percent compared to the previous quarter. The drop was a result of Russian consumers’ lower purchasing power, an overall increase in pork production across the country, imports from Brazil and the beginning of Lent in March in 2016.
Meat Processing Division
Cherkizovo’s Meat Processing Division saw its sales volume increase by 28 percent year-on-year to 48,615 tons from 37,846 tons in the first quarter. This growth resulted from the launch of a pig slaughter plant at the Dankov meat processing plant in the second half of 2015, which boosted both volume and product assortment.
During the reporting period, the average price fell by 2 percent year-on-year to RUB165.11/kg due to consumers’ preference shifting to more affordable products given their lower purchasing power. On a quarter-on-quarter basis, the average price fell by 3 percent.