Russia's London-listed meat producer Cherkizovo group said on Wednesday it would buy two pork plants from its main shareholders, a move that could raise capacity by 30 percent.
In a statement Cherkizovo said two plants recently built in central Russia would cost the group about $100 million, of which $20 million would be paid in cash.
Cherkizovo will also assume the plants' debts of some $80 million to state-run banks Sberbank <SBER03.MM> and Rosselkhozbank. It expects to complete the purchase in the second half of 2010.
Cherkizovo, controlled by businessman Igor Babayev and members of his family, also expects to increase its poultry production by 40 percent in 2012.
The group's poultry meat sales declined by just 2 percent to 184,300 tonnes last year, while pork segment sales increased 38 percent to 53,000 tonnes.
Processed meat sales, however, fell 10 percent to 130,000 tonnes due to lower consumption resulting from the economic crisis.
Construction of third module completed at Lipetskmyasoprom pig facility. New fodder mill fully operational in Lipetsk.
Cherkizovo Group, one of Russia's leading integrated and diversified meat producers, is pleased to announce the completion of construction of the third module at Lipetskmyasoprom, the Group's industry leading pig facility in the Lipetsk region. The Group also announces the opening of its new fodder mill in the Lipetsk region close to the pig farm site.
Lipetskmyasoprom Third Module
The construction of the third module at its Lipetskmyasoprom pig facility has been completed. Once the third module reaches its full capacity, which is expected to occur during 2009, it will provide an extra 12,500 tonnes of live weight volume at the site, giving a total production capacity at the site of approximately 37,500 tonnes оf live weight per year across all three completed modules.
The Group expects the fourth, and last, module at Lipetskmyasoprom to be constructed and become operational by the end of 2008. With the fourth module running at full capacity the total production capacity will increase by further 12,500 tonnes, providing a total capacity across all four modules at Lipetskmyasoprom of approximately 50,000 tonnes of live weight per year.
On completion the Lipetskmyasoprom facility will consist of a total of the four modules with 4,800 sows contained in each module with an expected capacity to breed approximately 100,000 pigs per year (12,500 tonnes of live weight) in each of the 4 modules.
The construction of the first two modules of the Lipetsk pig facility commenced in June 2005. The first two modules became operational in February 2006 and are currently operating at full capacity.
The Lipetsk facility uses state-of-the-art equipment from leading European producers. Livestock is provided using a highly productive breed of pigs bought from Dan-Bred, a leading European.
Source: newsroom - meattradenewsdaily.co.uk
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