Russian meat group Cherkizovo is looking to capitalise on existing assets in the south-western region of Voronezh by expanding pork and poultry production.
The company plans to spend almost RUB4bn (US$104.1m) on developing its business in the region between 2014 and 2017-18, a spokesperson said.
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The programme follows Cherkizovo’s acquisition of poultry firm Lisko Broiler earlier this year.
Asked why Cherkizovo was embarking on the investment, the spokesperson said: “Synergy – in poultry, we acquired Lisko Broiler earlier this year and we can increase capacity simply by expanding some narrow spaces – for example, slaughtering facilities,” he said. “Also we have a grain production in the Voronezh region, so this is beneficial from feed point of view.”
Cherkizovo plans to add 25,000 tonnes in live weight to its poultry production, which has a current capacity of 96,000 tonnes. It also plans to add 36,000 tonnes of live weight to pork, which has a capacity of 15,000 tonnes.
Last month, Russia banned meat imports from markets including the US and the EU in retaliation for sanctions over the crisis in Ukraine. The spokesperson said Cherkizovo’s sales since had been “in line with our plans”.
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By GlobalData“We’re operating a livestock business where you can not instantly increase the production,” he added.
There have been signs prices of some affected foods have increased in Russia since the ban. Asked if Cherkizovo had looked to increase its price since Moscow introduced the embargo, the spokesperson said: “Our prices grow in line with the market. We did not increase prices significantly after the ban, though some slight increase is seen, as we have a cost pressure due to rouble devaluation.”
