Cherkizovo pork plant purchase could up capacity 30%

Russia's London-listed meat producer Cherkizovo group said on Wednesday it would buy two pork plants from its main shareholders, a move that could raise capacity by 30%.

The deal is scheduled to close in the second half of 2010.

The total amount of the deal may exceed US$100 million, of which US$20 million will be paid in cash and the remaining to pay off the debt of the acquired companies.

The pig farms located in Penza and Lipetsk regions and designed for 4,800 sows each, consisting of several separate sites. It is expected that the full production capacity of each complex will be 12,500 tonnes of pork of live weight per year.

Each complex consists of areas for breeding, growing and fattening, and equipped with the modern technologies and equipment provided by a well-known Danish company DanBred.

By 2011, their total production will amount to 20,000 tonnes of pork in live weight, while by 2012, production is seen to reach 25,000 tonnes, up 40%.