SUBSCRIBE

Breaking News on Global Meat Trading and Processing

Headlines > Financial

Read more breaking news

 

 

EU meat companies plan major Russian investment

Post a commentBy Eugene Vorotnikov , 06-Jun-2017
Last updated on 06-Jun-2017 at 12:52 GMT2017-06-06T12:52:52Z

The huge Russian market is tempting meat processors to invest significantly in the country
The huge Russian market is tempting meat processors to invest significantly in the country

Global meat players including Germany’s Tönnies and Denmark’s Idavang are planning to invest heavily in major Russian projects. 

Government officials claim the scale of Russia’s 144 million population could be overcoming reluctance from overseas companies to develop operations in Russia because of its economic recession and sanctions.

A spokesperson for German meat processor Tönnies told GlobalMeatNews about plans to invest up to RUB5.4 billion (US$95m), building the first stage of a slaughterhouse complex in the Belgorod region (Oblast) in southern Russia.

According to the company’s press service, the new slaughterhouse will have the capacity to process up to 728,000 head of pigs a year, making it one of the largest abattoirs in Russia.

Set up to supply Russia

The spokesman for Tönnies Fleisch Russia said: “Construction work will start in the coming months. The enterprise will include a slaughter line with a capacity of 350 head per hour, as well as a line for cutting and packing products.” He said further upcoming investment was planned so that, by 2020, the plant’s capacity would reach 1.04m head per year, and the company has longer term plans to increase this to 2.08m head. The company has already purchased a plot of 30 hectares, in the Alekseevsky district of Belgorod.

According to the company, up to 70% of the plant’s future production will be sold in Russia, with the rest exported, probably to European Union states.

This announcement follows the release of Tönnies Fleisch plans last September (2016) to build 20 pig-breeding complexes throughout Russia and a meat-packing plant in the Voronezh region, costing RUB35bn (US$618m).

Russian economic growth driving capital investment
 
It also follows the announcement of plans by Denmark’s Idavang, another leading EU meat producer, to increase its Russian operations. The company already operates two pig farms in Russia – located in the St Petersburg and Pskov (near Estonia) regions.

The company’s Russian press service told GlobalMeatNews that it wanted to increase the annual output capacity of its Russian pig farms by 98,000 units by the end of this year, up from the current level of 300,000 pigs. This would involve building a new complex in the St Petersburg region.

According to analysts at Russia’s Ministry of Agriculture, foreign investors in Russia are attracted by the scale of the country’s market and its prospects for further growth, now Russia’s economy is growing again (the World Bank is predicting 1.5% GDP growth for 2017). Ministry statistics suggest that Russia’s pork production has been booming in the medium term; in the past 10 years, industrial pigmeat production has increased sevenfold, with general per capita pigmeat consumption doubling over these years.

Post a comment

Comment title *
Your comment *
Your name *
Your email *

We will not publish your email on the site

I agree to Terms and Conditions

These comments have not been moderated. You are encouraged to participate with comments that are relevant to our news stories. You should not post comments that are abusive, threatening, defamatory, misleading or invasive of privacy. For the full terms and conditions for commenting see clause 7 of our Terms and Conditions ‘Participating in Online Communities’. These terms may be updated from time to time, so please read them before posting a comment. Any comment that violates these terms may be removed in its entirety as we do not edit comments. If you wish to complain about a comment please use the "REPORT ABUSE" button or contact the editors.

Related products

Related suppliers