OREANDA-NEWS. March 25, 2008. Cherkizovo Group, one of Russia's leading integrated and diversified meat producers, is pleased to announce today the completion of construction of the third module at Lipetskmyasoprom, the Group's industry leading pig facility in the Lipetsk region. The Group also announces the opening of its new fodder mill in the Lipetsk region close to the pig farm site.

Lipetskmyasoprom Third Module

The construction of the third module at its Lipetskmyasoprom pig facility has been completed. Once the third module reaches its full capacity, which is expected to occur during 2009, it will provide an extra 12,500 tonnes of live weight volume at the site, giving a total production capacity at the site of approximately 37,500 tonnes оf live weight per year across all three completed modules.

The Group expects the fourth, and last, module at Lipetskmyasoprom to be constructed and become operational by the end of 2008. With the fourth module running at full capacity the total production capacity will increase by further 12,500 tonnes, providing a total capacity across all four modules at Lipetskmyasoprom of approximately 50,000 tonnes of live weight per year.

On completion the Lipetskmyasoprom facility will consist of a total of the four modules with 4,800 sows contained in each module with an expected capacity to breed approximately 100,000 pigs per year (12,500 tonnes of live weight) in each of the 4 modules.

The construction of the first two modules of the Lipetsk pig facility commenced in June 2005. The first two modules became operational in February 2006 and are currently operating at full capacity.

The Lipetsk facility uses state-of-the-art equipment from leading European producers. Livestock is provided using a highly productive breed of pigs bought from Dan-Bred, a leading European producer.

New Fodder Mill

The Group has also opened its new fodder facility including fodder mill and mill grain elevator in the Lipetsk region close to the pig farm site. Cherkizovo's new fodder mill will fully supply fodder for the Lipetskmyasoprom facility. The mill's capacity constitutes more than 180,000 tonnes of fodder per year, or, almost 30 tonnes per hour. The mill uses equipment produced by Ottevanger, a Dutch company. The new facility also incorporates a newly built mill grain elevator near the fodder mill. The elevator is already in operation with a current capacity of 100,000 tonnes of grain on site per year.

Sergey Mikhailov, CEO of Cherkizovo Group, said:

"Today's two openings are an important landmark for the Cherkizovo Group. The pig farm in the Lipetsk region remains on track to deliver a total of 50,000 tonnes a year once the fourth module is running at full capacity, which is expected in 2009, helping to drive revenues in our Pork Division. At the same time the new fodder mill will provide feed into the site allowing us to control the quality of our end product for consumers, whilst also driving operational efficiency and allowing us to maintain tight cost control."