Caution over Russian pork investment
“Miratorg has doubts over whether the planned construction of 10 pig farms in the Kursk region, which was declared as an investment of RUB11bn (US$370m), would be worthwhile,” said a spokesperson for the company.
The cancellation of the project would mean that six of the pig farms will never be built, with only four farms constructed so far. According to the initial plan, the 10 farms were designed for 27,500 sows simultaneously, which would have allowed Miratorg to produce 120,000 tonnes (t) of liveweight pork per year. With only four farms, the capacity increase will be limited to 50,000t of liveweight pork per year.
“In 2013, we launched four pig farms at a total cost of RUB4.5bn (US$150m) in the Kursk region. Further implementation of the investment project will depend on certain market conditions,” said Dmitry Lgovski of Miratorg.
The company’s directors have warned that uncertainty in the Russian pork market will hamper development of the national pig industry, with businesses currently afraid to invest money in pig breeding.
“In the next two to three years there will probably not be any large new projects in the pig farming sector. Continuous growth is possible only when you are sure you will be supported. The state actually has the desire to support the farmers, but the question is, what are the remaining tools to do this?” said Viktor Linnik, president of Miratorg.
However, the company added that it continued to show stable growth. This year, it plans to produce 363,000t of pork in liveweight which is 83,000t higher than in 2012.