RusAgro pushes into China by building pig farms
It hopes to attract the China National Cereals, Oils and Foodstuffs Corporation (COFCO) and several other Chinese agricultural firms to the participate in future Russian-Chinese pork trade.
Maxim Basov, the CEO of RusAgro, revealed that in addition to a major pig production hub in Primorsky Krai, Russia, the company is also considering construction of some pig farms in China.
Currently, he said, RusAgro is choosing the appropriate region for the project, however some investment agreement must be signed with the local authorities and the project will be taken for final revision with the Board of Directors.
Ongoing government talks
Basov has not revealed investment cost or planned capacity for the project. The press-service of RusAgro also provided no further details on request of GlobalMeatNews.
Meanwhile, in early July Russian vice Prime Minister Yuri Trutnev visited China and held some discussions on the Russian-Chinese meat trade with Wang Yang, Deputy Premier of the State Council of China. Following the meeting, Russian Ministry for the Far East Development issued a release, confirming the plans to RusAgro to build pig complex in Russia, which would be focused primarily on export supplies to China.
According to the release, Trutnev said that some Chinese firms could be attracted to provide some “bilateral support to the project”, including the support on the Chinese side.
Investment in poultry, dairy
Speaking earlier this year, the main stakeholder of RusAgro Vadim Moshkovish said that in 2018 it plans to complete the 50% of its pig project for one million heads of pigs in the Russian Far East, so by that time the first pork should hit the grocery shelves in the region. The next phase, he added, is tied to the development of export supplies, as the demand for pork in bordering countries nearly 10 times exceeds the demand in Russian Far East.
Since 2014 the Russian Agricultural Ministry and Ministry for the Far East Development has urged Chinese authorities to open countries market for Russian pork, and during this period Russian officials have claimed several times that a positive decision on the matter is in the pipeline. However, it is believed that those talks were impacted by the veterinary problems in Russia, including African swine fever, which was discovered in Siberia in 2017.
RusAgro also plans to invest additional Rub 20 billion (US$300 million) into construction of the several poultry farms in the Russian Far East with the combined production capacity of 100,000t of chicken meat per year. According official data from the Russian State Statistical Service, all poultry farms in Russian Far East manufactured 62,000t of chicken meat in 2016. Additionally, RusAgro plans to invest US$1 billion into erecting dairy businesses in the same region within the coming years, the company’s executives said recently.