“Cherkizovo Group” is the anchor investor in Lipetsk region

May 29, 2014

In his speech, Mr. Babaev noted that in the last ten years of operation, Cherkizovo Group had made Lipetsk Region one of the ten largest poultry meat and pork producing regions. The company produces more than 60% of all poultry meat and pork in the region.

During this time, Cherkizovo invested more than 18 billion roubles in regional development, paid taxes of more than 2.2 billion roubles, and created nearly 4,000 jobs.

Mr. Babaev also talked about the company’s priority projects in Lipetsk Region, which include Europe’s largest hatchery with laying capacity of 240 million eggs p.a. and renovations at the Dankov Meat Processing Plant that started last month.

“Lipetsk Region has always been of strategic importance for Cherkizovo Group,” Mr. Babaev said. “Our main pork production capacity is located in the region, and last year we acquired the Dankov Meat Processing Plant with a slaughtering facility. Given the current situation on the pork market, business efficiency is directly related to having our own modern slaughtering and processing facilities; therefore, we decided to upgrade the Dankov Meat Processing Plant.

Our experience of effective cooperation with the regional government headed by Oleg Korolev assures us that the region’s leaders will fulfil their obligations to investors. This means we can implement new investment projects in Lipetsk Region with minimum risk.”

In his speech, Mr. Babaev said the company had started repairing and retrofitting the Dankov Meat Processing Plant this year. The project involves modernizing the slaughtering facility by installing an automatic slaughtering line with capacity of 220 pigs per hour manufactured by the Italian company Petrocelli, expanding and upgrading both the refrigeration plant with dual cycle meat cooling capability and the loading racks, replacing the weighing equipment, buying special purpose trucks, rebuilding the treatment plant, laying a gas pipeline and constructing a boiler house. The total cost of the work will be 780 million roubles.

After the renovations are completed, the production capacity of the slaughtering line at the Dankov Meat Processing Plant will increase to 124,000 tonnes live weight p.a.

At the end of his speech, Mr. Babaev thanked the leaders of Lipetsk Region for their assistance in implementing the Company’s projects, and expressed confidence that the beneficial partnership between Lipetsk Region and Cherkizovo Group as the anchor investor in the region’s agricultural sector would continue to flourish in the years to come.

About Cherkizovo Group

Cherkizovo Group (LSE: CHE) is the largest meat and feed manufacturer in Russia. The Group is one of the top three companies serving Russia’s poultry, pork, and meat processing markets. The company’s best known brands are Cherkizovsky, Petelinka, Kurinoe Tsarstvo, and Mosselprom. CEO Sergei Mikhailov and his family control 63% of Cherkizovo Group, and 37% of the shares are quoted on the LSE and RTS/MICEX.

Thanks to its vertically integrated structure, which includes agricultural land, grain storage facilities, own feed production, livestock breeding, growing, and slaughtering, as well as meat processing and integrated distribution, Cherkizovo has consistently delivered sustainable revenue and profit growth. The company’s consolidated revenue in 2013 was more than USD 1.6 billion, and Cherkizovo produced more than 500,000 tonnes of meat products.

Cherkizovo Group’s strategy calls for organic growth and setting up new plants, as well as consolidating its assets. Within the last five years alone, Cherkizovo Group has invested more than USD 1 billion into the development of Russia’s agriculture sector.