Source:  John Strak, MEATINGPLACE.COM, 11/30/10

The CEO of one of Russia’s largest integrated pork and poultry producers predicted the country will reach self-sufficiency by the end of next year and may need to further reduce import quotas.

“We welcome the government’s recent announcement to decrease import quotas for 2011. However, with the anticipated growth in domestic production, the market is expected to reach self-sufficiently levels towards the end of 2011 and further quota reductions may be required,” said Cherkizovo Group CEO Sergey Mikhailov in a news release announcing the company’s financial results.

Cherkizovo Group is a vertically integrated, agro-industrial company with operations spread across the full production cycle and across Russia. It deals with feed production and poultry and pork breeding, processing and distribution.

The company reported revenues were up 20 percent to about $877.7 million for the first nine months of 2010 compared to $730.1 million in the nine months of 2009. Gross profits increased 16 percent to $235.9 million while net income rose 26 percent to $104.4 million.

The Group also announced it has acquired two pork farms in the Penza and Lipetsk regions and is constructing pork farms in the Tambov, Voronezh and Lipetsk regions. These developments will increase the Group’s overall capacity to an estimated 153,000 metric tons per year.

Mikhailov said he anticipates that the Group has approximately half of its grain stock needs for 2011, but is “actively continuing to secure further grain supplies.”

Mikhailov went on to say, “We are now witnessing a slight oversupply of meat in the market, as less efficient producers and individual households are slaughtering livestock due to grain shortage. Combined with an increased share of poultry imports in the second half of this year, this puts a downward pressure on selling prices, especially for poultry sales. This may continue into the beginning of 2011, as producers will accumulate stocks.”

Cherkizovo Group was formed in 2005 through a combination of the Cherkizovsky agro-industrial group and the Michailovsky agro-industrial group.  The Group’s brand portfolio includes the Petelinka, Chicken Kingdom, Cherkizovsky and Pyat' Zvezd brands.

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