Cherkizovo Group to invest US$100 million this year

Russian meat firm Cherkizovo Group is planning to invest up to US$100 million this year in the further development of its pork and poultry business.

Cherkizovo Group's CEO Sergei Mikhailov said, "The focus is now changing, as we are almost finished the development of our pig-breeding business."

Mikhailov said that the company has no lack of liquidity, however, the strategic development of the company's largest project for pork and poultry production located in Yelets may result in the investment of additional funds.

Earlier, the group is expecting a rise in total production in 2010 and a significantly higher output of its poultry in 2011 as a result of upgrades and a favourable market.

Mikhailov said the group expects the pricing environment for the products to remain positive driven by a decrease in imports and growing domestic demand.

Poultry meat sales in 2009 declined by 2% to 184,300 tonnes, while the pork segment sales increased by a hefty 38% to 53,000 tonnes. Processed meat sales, however, fell 10% to 130,000 tonnes due to lower consumption due to the crisis.

Meanwhile, Russia has cut import tariff quotas for 2010-12 as the country aims to become self-sufficient in pork and poultry in the next few years.

Russia has also effectively halted poultry imports from US when it banned meat treated with chlorine from January 19 and curtailed US pork imports citing the presence of an antibiotic.