Cherkizovo group launches a poultry breeding facility at its penza cluster

March 14, 2011

March 14, 2011 OJSC Cherkizovo Group (LSE: CHE) one of Russia’s leading integrated and diversified meat producers, is pleased to announce the official opening of the poultry breeding facility, «Komarovka», at its Penza cluster.

The facility, which was built as part of Cherkizovo’s ongoing poultry capacity increase project in Penza, consists of 34 bird houses, with a combined capacity of almost 1.1 million broilers. The bird houses will be populated from the Group’s own hatcheries, and equipped with state-of-the-art technologies that reflect the latest innovations and best practices in poultry keeping.

Building work on the facility began in 2010, and investment totalled approximately US $18 million. Thirty percent of the expenditure was funded by internal investment and the remaining seventy percent was provided by Sberbank.

In addition, the Penza region capacity increase project will also include the completion of the following by summer 2011:
— 89 bird houses at both existing and new sites of the Vasilievskaya factory
— A state-of-the-art slaughtering facility with an hourly capacity of up to 8,000 heads, in addition to the existing facility, which has an hourly capacity of 6,000 heads
— An incubation facility for 105 million eggs per year
— A fodder factory with an annual capacity of over 300,000 tonnes

The whole capacity increase project is expected to be complete by the beginning of 2012, raising the current annual capacity of the factory from 61,500 tonnes to 132,000 tonnes of live weight poultry meat.

Sergey Mikhailov, CEO of Cherkizovo Group said: «The launch of the poultry breeding facility at Penza marks another significant stage in our capacity increase project. Investing to improve the capacity and efficiency of our production sites continues to be one of Cherkizovo’s main priorities. Our development in the Penza region will ensure we are best placed to take advantage of increased poultry demand, particularly in light of the Russian government’s measures to achieve self sufficiency in poultry production.»

Notes to editors:

Cherkizovo Group OJSC is one of the largest Russian meat producers. Its business is organised into three segments: poultry production (four full-cycle poultry production clusters), pork production (seven pork production complexes), and meat processing (seven meat processing plants). In addition, the Group produces its own fodder (2 fodder mills), and sells its products through its own three trading houses. Cherkizovo Group enjoys dominant market positions, and its portfolio includes leading brands, such as Petelinka, Chicken Kingdom, Cherkizovsky, and Five Stars.