Cherkizovo Group Begins New Stage of Development in Voronezh region

July 7, 2017

Voronezh, Russia – 7 July 2017 – Cherkizovo Group (LSE: CHE; MOEX: GCHE), the largest vertically integrated meat and feed producer in Russia, today announced It plans to build 32 poultry houses. Details of the project were discussed at a meeting between Igor Babaev, the founder of Cherkizovo Group and Aleksey Gordeev, the governor of the Voronezh region.

Cherkizovo Group is the major agricultural investor in Voronezh region, and has long and successfully cooperated with the regional authorities. This partnership has led to the construction of modern pork and poultry farms, a feed mill, along with cultivating many thousands of hectares of agricultural land. The Group employs around 2,800 local residents.

In 2014, Cherkizovo Group acquired LISCO Broiler. Today it is the largest producer of poultry meat in the region and produced more than 110,000 tonnes of meat in 2016. The Group invests continuously in development: upgrades technical equipment and improves working conditions.

Cherkizovo Group sees considerable potential for the further development of production in Voronezh region. Currently, the Group is ready to begin a new stage of development of LISCO Broiler by investing RUB2 billion in the construction of 32 poultry houses and the expansion of the slaughterhouse. The installed capacity will be enlarged by 20%, leading to livestock increase of 9 million heads per year, with total poultry meat production reaching130,000 tonnes of per year. The project will create 160 new jobs and increase the Group’s tax allowances. The estimated construction deadline is 2018.

At the meeting, it was underlined that Voronezh region should become a priority for the development of the Cherkizovo Group over the next 10-15 years. One of the primary tasks is to increase the land bank and crop production which is significantly less than in neighbouring areas where the Group has successfully established itself as an effective crop producer.

The meeting also discussed other investment projects, particularly in the field of pork and feed production, including the African Swine Fever Virus control programme.