CHERKIZOVO GROUP TO DOUBLE PRODUCTION AT ITS PENZA POULTRY CLUSTER

February 18, 2010

IN 2012 GROUP’S POULTRY PRODUCTION WILL INCREASE BY 40%

OJSC Cherkizovo Group (LSE: CHE) one of Russia’s leading integrated and diversified meat producers, is pleased to announce the details of a large-scale capacity increase project at its Penza poultry cluster.

Phase one of the Penza project was successfully completed in 2009 with the reconstruction of the Vertunovka site, which is now one of Europe’s largest parent stock facilities, with a production capability of 60 million incubatory eggs per year.

Under phase two, Cherkizovo will construct the following facilities at the Vasilievskaya poultry factory:

• Incubation facility for 105 million eggs per year, which will become one of the largest facilities of its kind in Europe. Cherkizovo plans to launch this facility in  Autumn  2010 
• Circa 100 bird houses at both the existing and new sites of the Vasilievskaya factory, with the majority to be launched this year
• State-of-the-art slaughtering facilities with an hourly capacity of up to 8,000 heads

The project is funded through 1.1 billion roubles (approximately $37 million)  of internal investment and a further 2.5 billion roubles (approximately $83 million) of support from Sberbank of Russia.

This second phase is expected to be complete by the end of 2011, raising the current annual capacity of the factory from 60,000 tonnes to 120,000 tonnes of live weight poultry meat. Cherkizovo Group also commenced a large-scale project at its Bryansk poultry cluster last year, where capacity is projected to almost double to 63,500 tonnes of live weight poultry meat per year. The combined impact of both projects will increase the total poultry production of the Group by 40%.

                                                                                                                                                                                  
Sergei Mikhailov, CEO of Cherkizovo Group said: “Cherkizovo Group welcomes the Government of Russia’s recent provisions aimed at stimulating demand for national poultry producers by reducing poultry import quotas and restricting the use of chlorine as an anti-microbial treatment in poultry processing. These measures are entirely consistent with the Company’s strategy to develop and increase production capacities at our poultry facilities. Our project to double capacity at Penza will contribute to the development of the Russian poultry market. Our goal is to meet growing domestic demand and provide consumers with quality, locally sourced meat”.