Pork prices will stabilise at the end of the year - Cherkizovo Group CFO

November 29, 2012

Pork prices were much lower in the second and third quarter of this year but will  stabilise in December and early next year at 70 roubles per kilogram of  live weight, said Cherkizovo  Chief Financial Officer  Ludmila Mikhailova in a conference call. 

 According to Mikailova, the drop in the price of pork was caused by two factors: : first, the drop itself was seasonal as consumers  actively switched to poultry. The second reason was that distribution of live pigs was affected by African swine fever (ASF)."At this point, they will improve. They will not return to the level of the beginning of the year at more than 80 roubles per kilogram, but now they are stabilising, possibly at the level of 70 roubles,"  Mikhailova said. 

 In November, according to the National Meat Association (NMA), in connection with the entrance into the World Trade Organization, the Russian Federation  has annulled the duty on the import of pork and   has decreased the duty on the import of live pigs from 40% to 5%. This iswhy, in September, the price of pigs fell from an average of 90-95 roubles per kilogram for live weight to 70-75 roubles per kilogram. Prices of Pork have decreased from 140 to 115-120 roubles per kilogram. 

 Mikhailova added that the company expects the EBITDA for the year to be more than 10 billion roubles. 

 OJSC Cherkizovo Group is an agro-industrial company with full cycle of production from feed to finished meat products. The structure of the Group consists of 7 poultry production facilities, 14 modern pork production facilities, six meat processing plants and 6 feed mills, grain storage facilities, and a land bank exceeding 100,000 hectares. The portfolio of Cherkizovo brands  includes, in particular, Petelinka, Chicken Kingdom, Cherkizovsky and Empire of taste.