Cherkizovo, one of the largest meat producers in Russia, has rolled out plans to invest 8.5 billion roubles (US$ 126 million) in new pig farms in the Russian Tambov region, the company said in a statement on its website.
The project is expected to add 45,000 tonnes per year to the company’s pig division output, which currently stands at 300,000 tonnes per year in Central Russia. Under the project, Cherkizovo plans to build 4 finisher sites designed to accommodate 40,000 pigs each.
Cherkizovo also said it planned to invest more than 4 billion roubles in ramping up feed production by expanding the production of a feed mill in Tambov region’s Pervomaysky district. The facility is currently serving only the needs of Cherkizovo’s poultry division, Tambov Turkey.
After the expansion, which is slated to be finished in 2023, the feed mill is set to produce 60 to 80 tonnes of feed per hour.
Sergey Mikhailov, CEO of the Cherkizovo Group, commented: “In the next few years, Cherkizovo plans to significantly increase its meat processing volumes, which means that we are going to need additional pig farms. For their construction, we have opted for the Tambov region thanks to its sound investment climate and many years of successful projects in pork, poultry, crop, and feed production.”
Maxim Yegorov, head of the Tambov region, said that the new project would strengthen the role of the region as Russia’s major food hub, added that the agreements reached with Cherkizovo will be formalised at the St Petersburg International Economic Forum, mid-June 2022.
With the new Tambov project, Cherkizovo is trying to intensify the competition in the oversaturated Russian pork market in a bid to take market shares from competitors, taking advantage of the good production cost level, the Russian newspaper Kommersant reported, citing local market participants.
Yuri Kovalev, general director of the Russian Union of Pork Producers, told the publication that the construction of new pig farms was part of Cherkizovo’s plans several years ago.
Kovalev said, “This fits into the paradigm of boosting production volumes, under which the group announced plans of establishing a meat processing cluster in the Tula region. Companies of this level are trying to create a closed cycle in order not to buy live animals on the side – this reduces the risks, including those of introduction of the African Swine Fever.”
Kovalev explained that Cherkizovo is ready to compete even in the context of the oversupply currently seen on the Russian pork market. He added, “This is one of the strongest players with good productivity and cost indicators, comparable with the best world practices. The struggle for market shares will continue.”