Moscow, Russia – 6 June 2019 – Sergey Mikhailov, CEO of Cherkizovo Group (MOEX: GCHE), had a business meeting with Alexander Nikitin, Head of the Tambov Region Administration, at the St Petersburg International Economic Forum.
The parties discussed further cooperation between Cherkizovo Group and the region's government. Tambov Turkey, one of the Company’s key assets in the region, had a live-weight output of around 55,000 tonnes in 2018. The meeting highlighted the steadily growing domestic demand for turkey meat seen in recent years.
In view of this trend, the Company may consider implementing the second stage of Tambov Turkey and hopes that the region's government will support the project to ramp up its capacities by 50% and effectively achieve a 29 ktpa increase in live-weight turkey output. The second stage might include building several more nursery and finisher sites in the region's Pervomaysky District.Depending on the number of sites and total investments in the processing facility, the project costs may hit RUB 3.5–4.5 billion. The Company expects to complete the project in two years after the investment decision. The ramped-up facility will create 100–200 jobs.
Another issue discussed at the meeting with the governor was the transport accessibility of Cherkizovo Group’s existing and new facilities to secure their seamless operation. This is where the Group needs the local administration's support.
Cherkizovo Group is the largest investor in the Tambov Region’s agriculture. Over the past ten years, the Group has invested around RUB 9.7 billion in its grain, feed, poultry and pork segments. Its facilities in the region employ some 2,000 local residents. In 2017, the Group harvested 50,000 tonnes of crops and produced 131,000 tonnes of feed, some 55,000 tonnes of turkey and 50,000 tonnes of pork. The facilities incorporated in the Tambov Region are its major bona fide taxpayers.