July 3, 2008


Russia's Uralbroiler branches out into pig breeding


Agricultural Holding ''Uralbroiler'' is embarking on the second phase of its venture into pig breeding, with a 2 billion rubles (US$85.6 million ) investment in its pig breeding complex in Krasnoarmeysky district of Chelyabinsk Region.


The investment would bring production capacity of the plant to 15,000 tonnes per year.

Evgeny Narukov, the company's director, said the decision was a natural step in the development of the company.


Uralbroiler first started out as a chicken company before it owned its own feedmill. The next logical step would be for the company to diversify and venture into pig breeding.


Citing rising pork consumption in Russia, Narukov said market dynamics "is good enough''.

To prepare for operations, the company bought 8,000 sows and about 80 boars.
The complex's first production output is expected not earlier than in autumn 2009.
At full capacity it would be able to produce up to 1,300 tonnes of pork per month (15.6 thousand tonnes per year).


The company's 2-billion ruble investment comes on top of  1.5-billion rubles (US$64.18 million ) committed to the purchase of the pig complex.

If feed prices remain as they are now, the company should be able to recoup its investment in five years.


Feed wheat prices have grown 60 percent in the past year while meat prices have only risen 10-15 percent, Narukov noted.


About 80 percent of Uralbroiler's production costs comes from feed.

The company is planning to operate its own meat deep processing unit as well, converting semi-processed product to smoked product, sausage, pelmeni and about 50 other products.


Uralbroiler is developing two new trademarks, with one to focus on chilled and frozen meat, and the second for -processed products and finished products.


Apart from own processing facility construction, Uralbroiler is also planning to supply chilled pork to retail chains.

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