OREANDA-NEWS. January 04, 2010. OJSC Cherkizovo is one of Russia’s leading integrated and diversified producers of meat.  The company’s shares are traded in Moscow and via GDRs on the London Stock Exchange.  Cherkizovo is well positioned to benefit from the Russian government’s drive to increase domestic meat production.

The Customs Union has substantially increased the tariffs on import of live pigs, pork and beef by-products from January 1, 2010. Also, the Russian government has announced its decision to significantly decrease the import quotas on poultry and pork.      

Sergey Mikhailov, CEO of Cherkizovo Group, made the following comments on the Russian government’s new meat import quotas announced in Moscow today:

“We welcome today’s revised poultry and pork import quotas. Total poultry imports are to be reduced and capped at 780,000 tonnes and pork imports at 472,100 tonnes. These reduced quotas allow for healthy competition, and help define and maintain fair pricing while providing a good balance of imported and domestic meats in the Russian market. 

Russian poultry and pork producers have made good progress increasing their production capacity to meet growing domestic demand.  Today’s announcement will better enable emerging Russian meat producers to compete against international companies and provide the Russian market with quality, locally sourced meat.

Despite the significant natural potential for agriculture in Russia, the country remains the largest importer of meat in the world.  However, recent government support has enabled Russian producers to invest in infrastructure and innovations that leverage Russia’s potential and improve local production capacity.  We anticipate additional increases in domestic production as the benefits from investment programs are fully realized.

Between 2005 and 2008 Cherkizovo’s poultry volumes increased by 267% and pork volumes by 246% and we continue to invest and innovate to further drive production capacity. This year we have started a capacity expansion project in our Bryansk poultry cluster and expect to start a capacity expansion project in Penza cluster which will drive considerable volume gains in 2011. Production volumes at the Company’s pork division continue to increase and further volume gains are expected in 2010 and 2011. 

The new quotas, in conjunction with the existing support measures, will enable Russian meat producers to continue increasing their production volumes to meet the Russian government’s target to substantially reduce imports by 2012.”