Cherkizovo Group Starts the 2014 Sowing Campaign; anticipates a Harvest of a Quarter Million Tonnes

April 16, 2014

Cherkizovo Group, Russia’s leading meat and fodder producer, has started the 2014 sowing campaign. This year, the Company increased its operational land bank in the Moscow, Lipetsk, Orel and Voronezh Regions by 45%, to 58 thousand hectares. If weather conditions are favourable, Cherkizovo expects its harvest to increase by 45% compared to 2013, to approximately 250 thousand tonnes (bunker weight).

As in previous years, most of the land will be sown with wheat, corn, sunflower and barley. In 2013, the Group had high yields significantly exceeding the production average for Russia. Wheat yield was 5 t/ha vs. an average of 2.3 t/ha for Russia; corn yield was 9 t/ha vs. an average of 5.3, and sunflower yield was 3.5 t/ha vs. an average of 1.6 (all figures in bunker weight, source for averages; Ministry of Agriculture of Russia).

Cherkizovo has invested in modern high-tech agricultural equipment in order to promote the efficiency of the grain segment. In 2013, the company purchased imported tractors and harvesters, transfer bins, tow cars, and special equipment as part of a 200 million rouble ($7 million) investment. A new grain drying facility was constructed in Voronezh Region, and the Company plans to expand its agricultural equipment fleet in 2014.

Commenting on the launch of the 2014 agricultural sowing campaign, Sergei Mikhailov, Cherkizovo CEO, said: “We are constantly increasing our degree of vertical integration to improve our overall efficiency. Our strategy is a combination of cultivating grain for our fodder production needs and flexible procurement on the grain market. This helps us to ensure that we are always in the best possible position, from both an operational and financial point of view”.

Cherkizovo Group Starts the 2014 Sowing Campaign; anticipates a Harvest of a Quarter Million Tonnes

About Cherkizovo Group

Cherkizovo Group (LSE:CHE) is the largest meat and fodder producer in Russia and one of the top three companies serving Russia’s poultry, pork and sausages markets. The Company’s brands include Cherkizovsky, Petelinka, Kurinoe Tsarstvo and Mosselprom.

The Group includes 8 full cycle poultry production facilities, with a total capacity of 550,000 tonnes live weight p.a.; 14 modern pork production facilities with a total capacity of 180,000 tonnes live weight p.a.; 6 meat processing plants with a total capacity of 160,000 tonnes p.a.; 6 fodder plants with a total capacity of 1.4 million tonnes p.a.; grain storage facilities with a total storage capacity exceeding 500,000 tonnes; and a land bank exceeding 140,000 hectares. In 2013, Cherkizovo produced more than half a million tonnes of meat and processed meat products.

Due to its vertically integrated structure, which includes agricultural land, grain storage facilities, feed production, livestock breeding, growing and slaughtering as well as meat processing and integrated distribution, Cherkizovo has consistently delivered sustainable revenue and profit growth. In 2013, Cherkizovo’s US GAAP consolidated revenue exceeded $1,6 billion.

Cherkizovo’s strategy includes both organic growth and investment in new projects, driving the consolidation of the Russian meat market. Within the last five years alone, Cherkizovo has invested more than $1 billion into the development of Russia’s agriculture sector. Cherkizovo shares are quoted on LSE and MICEX.