Russian meat group buys agricultural assets
The assets, located in Voronezh – one of the most fertile regions of Russia – include a swine nucleus unit, grain storage facilities and an active land bank, and represent a total enterprise value of RUB4.46bn.
The swine nucleus unit includes a boar stud and has capacity for 400 sows, 1,000 nursery pigs and 6,700 finishers. The land bank is approximately 30,000 hectares (ha), with 25,000ha in active agricultural use. The grain storage elevators have a capacity of 150,000t. An additional grain elevator with a potential capacity for 90,000t has been acquired in the Penza region.
Cherkizovo said the new facilities would enhance the vertical integration of the company, enabling it to improve biosecurity in its pork production and manage costs more effectively. CEO Sergey Mikhailov said that the acquisitions marked a “major milestone” in the company’s growth strategy.
“This acquisition will enhance our genetic production and make a significant contribution to the sustainability of Cherkizovo’s pork segment, while also making the company’s pork operations more cost-efficient,” he said.
“We have acquired a fertile land bank in the Black Earth region, enabling Cherkizovo to secure its own grain supply, further increasing the degree of vertical integration. In addition, land plots will serve as a platform for further livestock breeding development.
“Grain storage elevators, capable of holding significant supply of grain, will give the company greater flexibility in its purchasing strategy and enable Cherkizovo to hedge against unfavourable conditions in the grain market.”
The Cherkizovo Group is Russia’s largest meat manufacturer and one of the country’s three main companies that serve the poultry, pork and meat processing markets. Last year, it generated $1.5bn in revenues, and company directors said they were looking to achieve further growth, both organically and through investment in new projects.
