Ukrainian business to spend $1bn on pig-breeding project in Russia
According to Alexander Zubarev, vice-governor of Kursk Oblast, the capacity of the project may be even higher, making it the largest development of its type in Russia so far.
“This will be a step-by-step construction of pig farms until the project achieves a total capacity of about 200,000t of meat in live weight,” Zubarev said. “We hope the site of the project will be in the north-western part of the region. Typically, such projects are implemented in stages, with each stage having the capacity of 10,000t-20,000t or 20,000t-45,000t. The first stage will be ready to launch next year.”
According to market players, Conti Group’s project may enter the list of the top three largest pork producers in Russia. However, the majority of Russian experts call the project “illogical”.
Depressed market
However, according to representatives of Russia’s National Meat Association, Conti has chosen the worst time to enter the Russian market as it is currently entering a period of depression.
“The statement of intent [to implement the project] has more PR [press] than actual calculation. Today, even the existing major players in the Russian market [are] scaling down projects, because of the record indebtedness under credits in the industry. And it is absolutely illogical to implement a pig-breeding project without interest rate subsidies from the state,” said head of the National Meat Association Sergey Yushin.
He added: “In addition, due to increased competition, prices have dropped significantly and Conti is going to undertake a project that would allow the company to enter the list of the top three pork producers in Russia. It would be much more logical to develop production in Ukraine, where labour is cheaper, competition is less and where the conditions for export are better.”
