Igor Babaev Discusses the Prospects for Agriculture in Vologda Region with the Governor

April 28, 2014

Chairman of Cherkizovo Group Board of Directors Igor Babaev discussed the prospects for agriculture in Vologda Region with the region’s Governor. Mr. Babaev particularly said that he was interested in developing dairy farming, which is a very important and socially significant line of agriculture.

Igor Babaev Discusses the Prospects for Agriculture in Vologda Region with the Governor

“Vologda Region has good agricultural potential, especially for dairy farming,” Mr. Babaev said. “We are currently looking at upgrading the Botovo LLC facility, which is not part of Cherkizovo Group. Successful implementation of this project costing about 100 million roubles will increase milk production by about 60%. This means Botovo LLC will be one of the region’s largest milk producers.”

The Governor of Vologda Region, Oleg Kuvshinnikov, also suggested the possibility of Cherkizovo Group buying some of the agricultural assets formerly included in OGO Group. However, according to Mr. Babaev, Cherkizovo Group was not considering this purchase, and only new construction projects could be discussed. In his opinion, spending money on maintaining old facilities was counter-productive. Centralization of cash flows for constructing new facilities is the only thing that would have a positive effect and benefit both the regional budget and investors coming to the region. Three important conditions for investors must also be met: resolving issues with communications, subsidizing interest rates on loans, and land for construction.

“We are pleased to welcome you and your team to Vologda. Cherkizovo Group is a serious investor with facilities that operate successfully in many parts of the country. Its products are in high demand in both local and national retail chains,” Mr. Kuvshinnikov said at the start of the meeting. “Expanding Vologda Region’s agroindustrial complex is a strategic priority for us. We are ready to implement major investment projects to increase agricultural production in the region. As Governor, I am prepared to do everything to ensure rapid expansion of your facilities in Vologda Region. Agriculture in the region needs an anchor investor.”

At the end of the meeting, Mr. Babaev said that Cherkizovo Group was ready in a week’s time to submit an investment program to develop livestock breeding in Vologda Region. “We can build pork complexes for both 5,000 and 10,000 sows. The only question is how actively the regional government will support this. I would like to thank Oleg for the meeting, and I think we will be able to quickly resolve all existing issues,” Mr. Babaev concluded.

Reference

Botovo LLC dairy complex has been operating since 2008 and has developed independently of Cherkizovo Group. Over this time, 65.6 million roubles were invested in the company, and output has doubled to 5,000 tonnes per year. The upgrading plan for the facility includes complete renovation of the farms and buying the very latest equipment. After the project is completed, the number of dairy cattle will increase by 48% to 1,215 head, and milk production will reach 8,000 tonnes per year.

The Group’s facilities in Vologda Region also include Botovo CJSC, a pork complex with more than 40,000 pigs. More than 1.3 billion roubles have been invested in upgrading the facility since it became part of the Cherkizovo Group, which allowed to fully renovate the facility and has significantly increased the quantity and improved the quality of the products.