Cherkizovo authorized to export poultry meat to EU

Russia’s largest vertically integrated meat and feed producer, Cherkizovo Group, received news that the company has been granted authorization to export poultry meat from one of its facilities to the European Union (EU).

VICHAILAO, Bigstock
VICHAILAO, Bigstock

Russia’s largest vertically integrated meat and feed producer, Cherkizovo Group, received news that the company has been granted authorization to export poultry meat from one of its facilities to the European Union (EU).

Confirmation of compliance to the strict veterinary and sanitary requirements required by the EU has resulted in an EU Export Compliance Certificate awarded to the Vasilyevskaya poultry production facility. This certification is also recognized in other countries, such as Serbia, Macedonia, Georgia and South Africa.

“Receiving the EU Export Compliance Certificate is a direct result of our ongoing investment into the quality and biosafety our products and marks a significant step in our ongoing journey to expand into new markets,” commented Andrei Terekhin, Head of the Export Department of Cherkizovo Group. “The European market is one of our priorities and we are already in active negotiations with potential partners on dispatching a pilot batch of poultry products. With this certification, Cherkizovo Group is now well-positioned to capture growth opportunities in the broad European market. The exceptional quality and biological safety of our products lead the way on the domestic market and our goal is to position our products competitively in the EU.”

Sales volumes up at Cherkizovo but prices fall in last quarter

The news of Cherkizovo becoming approved to export poultry to the EU came just after the company released its quarterly financial results. For the first nine months of this year, sales volumes by Cherkizovo Group’s meat divisions have increased by 9 percent, 7 percent and 15 percent, respectively, in the Poultry, Pork and Meat Processing categories, according to the company’s third-quarter financial report.

For Poultry, sellable production weight reached 372,070 metric tons (mt) as the result of higher productivity, better efficiency and additional volume from the Mosselprom production site. Output for the third quarter was down by 4 percent, which the company attributed to a switch to halal production at its Lipetsk Chicken Kingdom facility. Over-supply in the market and consumers’ reduced buying power were blamed for the average selling price so far this year slipping 3 percent from last year’s level to RUB92.26 per kilo (US$1.46/kg).

Lower purchasing power of Russian consumers was also blamed for a 16 percent reduction in the average selling price for Cherkizovo’s Pork business. A year ago, the average was RUB103.52 (US$1.63) per kilo; for the year so far, it is just RUB86.59 (US$1.37). Comparing the last two quarters, however, the price has increased 10 percent, attributed to an outbreak of African swine fever and a decline in imports. Pork production for the year so far reached 131,581mt, up from 123,525 at the same point in 2015.

The best growth rate among Cherkizovo’s business segments has been in Meat Processing, which achieved an output of 158,647 mt over the first nine months of 2016. This compares with 135,247 mt a year ago, and is the result of the Dankov processing plant coming on stream in late 2015. At RUB166.91 (US$2.64) per kilo, the average price of processed products so far this year is around 4 percent below last year’s level, but it represents an increase of 5 percent when comparing the last two quarters.

Because of its seasonal nature, the company’s Grain Farming division is covered just once a year and its results are not included in the current period.

In September, Cherkizovo announced it had added four new members to its global management team to represent better the business aspects of security, people, investments and the Agro Division. At the same time, the board of directors appointed a new corporate secretary.

For the first time, Cherkizovo exhibited at SIAL Paris 2016 exhibition in October as part of the delegation organized by the Russian Ministry of Agriculture. Taking place in mid-October, the event is the world’s largest food innovation show.

Page 1 of 33
Next Page