Over the next decade, Cherkizovo Group is to target the Voronezh oblast in the west of the central belt of European Russia for further expansion.
The firm has already established a strong base in the region, but top priority now for Russia’s largest vertically integrated meat and feed producer is to acquire more land in order to increase its crop production to the levels it achieves in neighboring regions.
Already Voronezh’s largest poultry producer since acquiring Lisko Broiler in 2014, Cherkizovo has announced new plans to build a further 32 poultry houses in the region. Together with the expansion of the slaughterhouse, the cost of the investment will be two billion rubles (RUB; US$33 million).
When fully operational by 2018, the company’s poultry meat output in the region will increase 20 percent from the current 110,000 metric tons per year to 130,000 metric tons.
These announcements were made at a meeting between the founder of Cherkizovo Group, Igor Babaev, and Aleksey Gordeev, the governor of the Voronezh region. Also discussed were other investment projects in pork and feed production, as well as a control program for African Swine Fever.
Cherkizovo reviews its capital markets strategy
Cherkizovo Group is currently reviewing its capital markets strategy, including different ways to increase the free-float, stock liquidity and ensure sustained growth in shareholder value, according to Sergey Mikhailov, CEO of Cherkizovo Group.
It has been announced this week that the controlling shareholder of Cherkizovo Group, together with its affiliates, have reached agreement to acquire approximately 21 percent of the Group's ordinary shares and global depositary receipts (GDRs) from funds and portfolios managed by Prosperity Capital Management. At a price of RUB1,300 per ordinary share, the total amounts to around RUB12 billion (US$198 million).