February 3, 2010

Russia invests billions to boost meat sector

The Russian government plans to invest more than RUB107.6 billion (US$3.57 billion) in 2010 to further develop the national meat industry.

It is expected that most of the funds will be spent to subsidise interest rates on loans granted to the numerous projects currently implemented in the Russian meat processing industry.
 

Russian Minister of Agriculture Elena Skrynnik said the main objective of the fund is to ensure the financial support of the priority projects in the domestic meat processing industry in 2010, including the development of dairy and beef livestock, poultry industry, as well as primary meat and milk processing.

 
According to the Skrynnik, Russia's agricultural and meat industries posted a substantial growth last year, however an increase in production was observed not in all regions of the country.
 

Skrynnik also added there is a necessity to tighten requirements for the implementation of government programmes in the field of meat processing and agriculture.

Earlier, many Russian meat producers may leave the market in 2010 due to current financial crisis, according to reports. Russian meat producers have implemented an aggressive expansion in recent years, buying new assets through the use of borrowed funds that were available and relatively inexpensive.

However, a sharp rise in prices for raw materials - both import and Russian - has resulted in a significant reduction in profitability of the Russian meat business. In 2009, the price of meat raw materials in Russia grew by 60%, putting many of the local producers on the brink of collapse.