GAP Resource eyes takeover of Russian poultry farm

By Vladislav Vorotnikov

- Last updated on GMT

GAP Resource eyes takeover of Russian poultry farm

Related tags Poultry farming Poultry

GAP Resource has filed an application to the Federal Antimonopoly Service (FAS) of Russia to acquire the sixth largest poultry farm in the country from the agricultural holding Prioskolie.

The company is eyeing the takeover of Inzhavinskaya poultry farm in Tambov Oblast through its subsidiary, Belorechenskaya poultry farm, according to the information submitted to FAS.
It could be the largest acquisition in the country’s poultry industry in recent years.

The estimated design capacity of Inzhavinskaya farm is 110,000 tonnes (t) of broiler meat per year. If approved, the deal should increase GAP Resource’s combined production capacity by nearly 25% from 343,000t in 2016.

In 2016, Prioskolie was the second largest manufacturer of poultry in Russia, producing around 642,000t of meat.

Inzhavinskaya farm was the sixth largest poultry production facility in Russia, by revenue, in 2016, generating RUB8.8bn (US$150m), according to the estimations of the Russian media Agroinvestor.

Citing Russian analysts Agroinvestor reported that the cost of the deal could range between RUB 10bn (US$170m) and RUB 15bn (US$255m).

GAP Resource could not be reached for comment at the time of writing.  

Global changeover

Russian experts believe that the deal will lead to structural changes for GAP Resource, the largest Russian exporter of poultry meat in 2016.

“The new acquisition will definitely help the company restructure its sales strategy, focusing their southern operations on smaller birds for halal customers in the Middle East, Middle and Central Asia, North Africa and other countries. Besides, the company may better target the neighboring Caucasian republics: Armenia, Georgia, Azerbaijan”,​ Albert Davleyev, president of Russian consultancy Agency Agrifood Strategies, told GlobalMeatNews.

“The farms in Tambov region will allow GAP Resource increase its market share in the central part of Russia, while the ones in Stavropol and Krasnodar Krai and Rostov region will cover a vast territory of the Southern Federal District”​, Davleyev added.

It is believed that GAP Resource has put great effort into promoting poultry exports, particularly halal chicken.

In the statement, the company informed that it accounts for 23% of the poultry export from Russia, not providing, however, solid figures.

Russia has exported 121,400t of poultry in 2016, according to the data of the Federal Customs Service.

“GAP's leadership in Russian poultry exports is a result of a long-term and well developed strategy of expansion to the international markets which helps avoid increasing competition in the local market and get good revenues in hard currency successfully competing with traditional suppliers from Brazil, EU and the US,”​ Davleyev said. “There is no other company in Russia which dedicates so much time, effort, human and financial resources to this strategy implementation.”

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