Modern, vertically integrated Russian pork producer is planning to significantly expand its domestic production capacity to benefit from profit potential from import replacementThe Business
The Company is a vertically integrated pork production business that is being developed in the Ural-Volga region of Russia. The Company is implementing construction and modernization projects for six pig-breeding complexes with a total annual capacity of 440,000 pigs, a 200 ton per day feed mill and a slaughter and meat packing facility with an annual capacity of up to 400,000 pigs. The first pig-breeding complex, with a capacity of 45,000 pigs per year, has launched full operation.
The Company has gained ownership or entered into long-term leases (up to 49 years) on land plots for the construction of the pig-breeding complexes. It has also reached an agreement to lease up to 30,000 hectares of fertile land with the goal of securing a grain supply for its feed mill.
Market
Russia is the world’s largest meat importer, with imported meat accounting for almost 27% of the domestic meat market. Pork as a share of total meat consumption in Russia is expected to grow from current 28% to over 31%. The Russian pork market is highly fragmented. Russia’s three largest pork producers account for just 13% of the domestic pork market, while the respective figure is 60% in Europe and 70% in the United States.
Given the significance of pork imports for Russia and the fact that 60% of the
country’s pig stock belongs to non-commercial organizations and households, the need to develop commercial pig-breeding is evident. At present, the state provides substantial support to the Russian agro-industrial sector, in particular:
significant subsidies for loan interest payments;
tax privileges;
quotas on pork imports;
compensation for price increases on mixed fodder.
New capital resources are primarily needed to finance the construction of three pigbreeding complexes each with a capacity of 110,000 pigs per year.
Sector: AgricultureSegment: Flour/Hog ProductionRegion: RussiaFinancing Size: $20m to $50mContact: Chris Davies
Company: AVC AdvisoryTelephone: +7 495 684 0400Email: [email protected]