“Funding will be held by a pool of banks – most likely state-owned,” explained Alexander Linnik, chairman of the board of directors. “These investments will enable us to double our production capacity in the pork and beef sector, compared to current volumes.”
Meanwhile, CEO Viktor Linnik claimed that Miratorg’s beef production capacity would be doubled by as early as next year.
“This year we will produce 40,000 tonnes (t) of beef, including 4,000t of premium beef,” he stated. “Next year we will produce about 80,000t of beef, which include 8,000t–10,000t of premium meat.” Miratorg’s target is to reach a production capacity of 130,000t of beef by 2020.
In addition, the company’s statistics indicated that, last year, it produced 370,000t of pork, 4% more than in 2013. The company is currently embarking on several pork production projects in different regions of Russia.
“In particular, the company has entered several regions, including Smolensk and Kaluga Oblast, and we are currently negotiating with [the government] of Tula Oblast,” stated Alexander Linnik. “The holding company also intends to create a vertically integrated pork production facility in Kursk Oblast, where we are currently assembling a land bank.”
Meat exports outpace military sales
Meanwhile, according to Russian agriculture minister Alexander Tkachev, moves by the country’s largest meat producers are stimulating rapid development in meat exports. At a recent government meeting he noted that meat exports were booming, with the result that earnings from export food sales last year exceeded profits from the country’s military sales for the first time.
“Exports of poultry [last year] increased 12-fold during the year, reaching 70,000t and export supplies of pork are gaining momentum as well,” he claimed. “So far, we have only supplied 15,000t to export markets, but the dynamics of growth – up sevenfold in a year-on-year comparison – is very encouraging.”
Tkachev also noted that companies such as Miratorg and Rusagro were active in replacing imports, but that their current production capacities also made it necessary to export.
“We have to focus on exports of products with higher added value. Pork and beef products, among others, have great potential,” he stated. “The government should make an effort to promote our [meat] products abroad, in particular in Asia-Pacific.”
Most Russian agricultural holdings already have or are working on developing export programs. According to Alexander Linnik, Miratorg is ready to launch meat exports to countries such as Brazil, Canada and the US. By the end of 2016, the company aims to export up to 15% of the meat it produces.