Cherkizovo expands meat processing capacity in Moscow region

By Vladislav Vorotnikov

- Last updated on GMT

The company may start building the plant as early as 2019
The company may start building the plant as early as 2019
Major Russian meat producer Cherkizovo plans to invest RUB7 billion (US$115m) to add to its meat processing capacity in the Moscow region.

The investment agreement was signed between Cherkizovo and Andrey Vorobiev, governor of the Moscow region, during the St Petersburg International Economy Forum (SPIEF).

Cherkizovo was actively preparing the design concept for its new plant, which will be called Kashira-2, Sergey Mikhailov, CEO of Cherkizovo, said during SPIEF. The company may start building the plant as early as 2019, with a view to making the facility operational in 2020, said Mikhailov.

The company has recently finished building the biggest dried sausages plant in Europe in the same region.

In accordance with the investment agreement, the new plant will produce 60 tonnes (t) of the processed meats per day, including smoked meat products, ham and other sausages. The plant will also house a chopping unit with a daily production capacity of 100t. The production capacity of the plant could be expanded in future, added Cherkizovo.

It is not clear whether the chopping unit would also serve the needs of Cherkizovo’s dried sausages plant, also located in the Kashira district of the Moscow region, or other meat processing facilities within the company.

Mikhailov stressed that the project would be implemented with support from the regional Moscow Oblast authorities, although no details were given on what form this support would take.

Earlier, on its website, Cherkizovo reported that it was discussing the possibility of signing a Special Investment Contract (SPIC) on the Kashira-2 project with Russia’s Ministry of Agriculture. Under the terms of a SPIC, the Russian Government usually takes on an obligation to provide the investor with a preferential tax rate and other important incentives.

Elena Trifonova, official spokesperson for Cherkizovo, had not provided GlobalMeatNews​ with any additional details on the project by press time.

Russian sausages market is under pressure

However, the trends in the domestic sausage market do not appear overly promising for these new projects. In the period from July 2017 to March 2018, domestic demand for all types of sausages shrank by 4% year-on-year, according to research conducted by GfK.

Demand for sausages only increased in the north-west and Ural federal districts of Russia, the research revealed. It declined in other parts of the country, including in the Central federal district, where the Moscow region is located, according to GfK.

It is believed the domestic sausage market in Russia is coming under some pressure from healthy living trends, the development of the on-trade and the food delivery services in the country. As a result, demand for the most popular sausages in Russia has fallen over the past year.

Cherkizovo is among the three largest manufacturers of sausages in Russia, alongside the Ostankino meat processing plant and Abi Product, GfK has reported.

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