Sergey Mikhailov discusses investment projects with the Penza Region Governor

June 6, 2019

Moscow, Russia – 6 June 2019 – CEO of Cherkizovo Group (MOEX: GCHE) Sergey Mikhailov had a business meeting with Ivan Belozertsev, Governor of the Penza Region, at the St Petersburg International Economic Forum.

They discussed the key aspects of cooperation between Cherkizovo Group, as an investor, and the region, including the development of pork farming. As the second largest pork producer in Russia, Cherkizovo is already constructing new nursery and finisher sites in the Penza Region. Subject to favorable market conditions, the Group is willing to consider the feasibility of building additional sites in the area. Penza is the region Cherkizovo Group is banking on to develop its pork segment over the next five years. And as transport accessibility is a prerequisite for a well-functioning pork production facility, this is where the Group needs the local administration's support.

Poultry farming development is equally important for Cherkizovo. The Company is considering an upgrade of its Vasilyevskaya poultry farm, including replacement of two obsolete slaughter lines running at 8,000 and 6,000 birds per hour with a new modern line handling 13,000 birds per hour. Up to RUB 1 billion may be invested in this project. This is another area for the region’s possible backing of Cherkizovo’s initiative.

The administration could also contribute greatly to the Group’s poultry meat exports to China (the Vasilyevskaya farm has already been certificated for supplies to China) as the Company was listed among Russian exporters of poultry meat to the Chinese and EAEU markets.

Cherkizovo Group is the largest investor in the Penza Region's agriculture. Over the last ten years, the Company has invested some RUB 10 billion in crop and feed production, poultry and pork farming, as well as meat processing to ensure full-scale operation of two feed mills, pig production units, Vasilyevskaya poultry farm, Penza meat processing plant, and Mikhaylovsky grain elevator in the region. The Group’s entities registered in the Penza Region are its major bona fide taxpayers.