Tambov Turkey reaches full production capacity

May 30, 2017

Tambov region, Russia – 30 May 2017 – Cherkizovo Group (LSE: CHE; MOEX: GCHE), the largest vertically integrated meat and feed producer in Russia, announces it has reached full production capacity at the Tambov Turkey facility, a joint venture between Cherkizovo Group and Grupo Fuertes, Spain’s leading agricultural producer.

The ceremonial opening of the production facility for the growing and processing of turkey meat was held in the Pervomaisk district of Tambov region. This project will allow Cherkizovo Group to become one of the largest producers of this type of meat on the Russian market and allows Spanish partner Grupo Fuertes to test its business localisation model in Russia.

Representatives from the Russian side also included: Alexander Beglov, Presidential Envoy to the Central Federal District; Alexander Nikitin, Head of the Tambov Regional Administration; Igor Babaev, founder of Cherkizovo Group; and Sergey Mikhailov, General Director of Cherkizovo Group. The Spanish side was represented by: Ignacio Ibáñez, Ambassador of Spain in Russia; Tomás Fuertes, President of Grupo Fuertes; José Fuertes, General Manager of Grupo Fuertes and other officials.

"Today Cherkizovo Group is one of the main strategic investors in our region. Thanks to the successful public-private partnership, large-scale projects are being implemented in Tambov region. An enterprise with Spanish capital investment is a worthy example of import substitution, the adoption of advanced technologies and attraction of foreign capital for the development of the Russian economy. The value of such investments for the region is hard to overstate. From a strategic perspective, we are talking about both new jobs and impact on taxes," said Alexander Nikitin, Head of the Tambov Region Administration.

The business model of the plant envisages the comprehensive control of the entire production process: from raw materials used for production of mixed feeds to the sale of the finished products. This approach allows biosafety monitoring, primarily looking after the birds’ health and housing conditions, which ultimately underpins the task of controlling meat quality.

"This is our first joint project venture with Cherkizovo Group and the first project in Russia. Cherkizovo Group is the leader in the meat industry in Russia, the company with the most advanced equipment, technology and an uncompromising approach to quality,” said Tomás Fuertes, the President of Grupo Fuertes. “Years of cooperation have demonstrated that we were not mistaken in choosing this business partner for creating a unique enterprise in Russia, a facility which controls the product quality at all stages of production."

Today, Tambov Turkey’s livestock numbers more than a million heads. The production complex includes an incubator for 5.6 million eggs per year, four growth sites, nine finisher sites, a feed mill with an installed capacity of 180,000 tonnes per year, an elevator storage capacity of 90,000 tonnes, a meat processing plant with high-technology equipment and a modern waste treatment facilities. The plant employs 850 local residents.

"It took us five years and RUB 10.2 billion to launch this project,” Sergey Mikhailov, General Director of Cherkizovo Group, said. – Today the enterprise has reached its full installed capacity and the payback period is eight years. Turkey meat has great potential on the Russian market and total turkey meat production in Russia was about 230,000 tonnes in 2016. Tambov Turkey added another 50,000 tonnes today and can double the install capacity up to 100,000 tonnes. This is a serious step on the way to Russian food security, and towards developing its export opportunities over the long run."

Environmentally clean products by Tambov Turkey under the new "Pava-Pava" brand can already be found on the shelves of large retail chains. International food safety management compliance certificates ISO 22000:2005 and FSSC 22000 allow Tambov Turkey to make products of the highest quality for both Russian and European markets.