Tyson Foods plans Russian broiler expansion

By Eugene Vorotnikov, in Voronezh, Russia

- Last updated on GMT

Tyson Foods is looking to expand into the Russian broiler sector
Tyson Foods is looking to expand into the Russian broiler sector

Related tags: Russia, Livestock, Poultry

US meat processor Tyson Foods is expanding within the Russian poultry breeding sector via a deal with Samuel Lipman, a former board member of Cherkizovo Group, one of Russia’s largest meat and poultry producers and processors. 

Tyson plans to buy his 48.25% stake in the Broiler Budushego (Broiler of the Future), which accounts for around 40% of the Russian poultry breeding market. The processor hopes to make the acquisition via its Cobb-Vantress Inc subsidiary, with the Russian Federal Antimonopoly Service (FAS) having approved the deal.
According to an official spokesman for Alexander Tkachev, Russia’s agriculture minister, Broiler Budushego currently remains the main Russian supplier of parent stock of the Cobb 500 broiler, supplying these birds to about 40% of Russian broiler meat producers.

Galina Bobyleva, CEO of the Russian Poultry Union, stressed that there were two more key broiler breeding farms in Russia, operated by the US-based Aviagen Group in the Tula (south of Moscow) and St Petersburg regions. The strengthening of Cobb-Vantress in Russia is expected to boost competition within the sector.

To date, Broiler Budushego has acted as an official distributor of Cobb-Vantress in Russia, selling six million head in 2014. Clients have included leading Russian poultry producers and processors such as Cherkizovo, Belaya Ptitsa, Ak Bars and Elinar Broiler.

According to analysts at the agriculture ministry, speaking to GlobalMeatNews, the Cobb-Vantress deal would be a logical step towards consolidating its position in the Russian market as a base for further expansion.

A Cobb-Vantress spokesman is on record as having said the company wanted to control 80% or more of Cobb 500 supplies in Russia. However, the company declined to comment to GlobalMeatNews about the current deal. Financial details of the purchase have also yet to be disclosed.

According to Tkachev’s spokesman, poultry breeding has not been particularly profitable in Russia, and costs have fluctuated. Companies also have to pay heed to the risks posed by avian influenza – an outbreak was registered this early March (2017) at the Smena poultry farm near Moscow.

Should the sale go through, poultry sector experts talking to GlobalMeatNews​ said they would be looking to see whether Cobb-Vantress will take full control of Broiler Budushego, buying the Cherkizovo Group’s remaining stake. A statement from Cherkizovo said it did not plan to sell, and while it was not involved in the operational management of Broiler Budushego, it was interested in developing poultry breeding and genetics in Russia.

Related topics: Meat

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