Miratorg to support its beef project with leather production

By Vladislav Vorotnikov

- Last updated on GMT

Miratorg to support its beef project with leather production
Russia’s agricultural holding Miratorg has invested RUB2.8 billion (US$48.5m) into a leather plant in Bryansk Oblast, Russia - a side business for the company’s largest beef cluster.

In an official ceremony on 18 October, Miratorg president Viktor Linnik announced the start of the construction of the plant, which is expected to be completed by the end of 2018. At full production capacity, the plant should be able to process 1,500 tonnes (t) of rawhide monthly, releasing nearly 150,000 square meters of high-quality semi-finished leather for further use in the furniture and automotive industries.

“The plant is unique both in terms of equipment and the planned depth of rawhide processing,”​ Linnik said during the opening ceremony. “In addition to the automotive industry, we plan to supply leather for aircraft construction firms. Our customers have very strict quality requirements.

“The leather we can produce from the beef project we are currently implementing in Bryansk Oblast is of high quality,”​ he added.

The beef cluster in question covers 43 cattle farms and can process 130,000t of high-quality beef per year, according to the company. From January to October 2017, Miratorg produced 56,000t of beef, up 19% compared to the same period in 2016, but the company expects to bring the cluster up to full production by around 2020.

During the same event, Svatlana Kolpakova, chief technologist for the project, emphasised that Miratorg plans to manufacture semi-finished leather using the most environmentally friendly chrome-free technology. In this way, she added, the product will be safe for humans, while the production facility itself will be ecologically sound.

“That was one of the requirements of the company’s customers​,” Kolpakova said.

Miratorg has invested RUB450m into the construction of “advanced waste-treatment facilities” ​at the plant, to guarantee there will be no negative impact on the environment.

Speaking about the company’s customers, Miratorg’s executives revealed that semi-finished leather would partly be supplied to the domestic Russian market, and partly exported to Europe, including to the automotive plants of Porsche, BMW and Mercedes.

“The quality of our leather will be much higher than [the products of] our competitors. After all, in Europe the plants for processing leather were built a long time ago, so now, they can only be modernised. We are creating an advanced production facility with the most modern equipment and using the best experience in the world,”​ Linnik added.

Russian observers agreed that, by building its leather plant, Miratorg wanted to increase the profitability of its beef cluster. In particular, Natalia Kolupaeva, chief expert of Raiffeisen Bank in Russia, said the company was doing this instead of the utilisation or sale of rawhide, so that it could produce items of a higher added value and hence achieve higher margins.

Dmitry Sergeev, an official spokesperson for Miratorg, has not provided any further comments in response to a request from GlobalMeatNews.

Related topics: Russia, Financial, Beef

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