The RUB153 million (US$2.2m) plant will produce 2.5 tonnes (t) per shift or 600t per year of semi-finished products, sausages and deli meats, according to the company.
“The product range of the plant will include cooked sausages, frankfurters, sausages, smoked-cooked, smoked and fried sausages, delicatessen products, farcemeat, as well as chilled and frozen natural semi-finished products,” said the company’s press office, adding that the new facility would mostly receive meat from local farmers. It will also purchase raw meat from the southern regions of Russia.
The project is being aided by the administration of the President of South Ossetia. Vadim Vaneev, head of Eurodon, explained the choice of location for the new project was not just dictated by economic reasons.
“This is my home [South Ossetia]. I am glad that there will be such a modern facility near Tskhinvali [capital of the republic]. While the declared production capacity remains small, the main target will be to achieve economic efficiency in the business and prove that the country can create new projects and jobs,” he said.
The plant will occupy a total area of 16 hectares, with the commissioning of the facility scheduled for May 2016. According to Vaneev, the new facility should meet up to 50% of the region’s demand for finished meat products. According to experts, Eurodon’s new project is mainly socially and politically rather than economically motivated.
“There are certainly a lot of other, much more comfortable places to do business – in terms of infrastructure and political stability, for example. Rostov Oblast [where Eurodon is based] is struggling to increase the region’s investment attractiveness. South Ossetia does not have such things,” said the Andrew Smurygin development director of investment-financial company Solid.
In particular, according to Smurygin, serious logistical problems could prove an obstacle to the development of new business in the region. “This project should be focused primarily on local raw materials and mainly local consumption,” he added.
“For me, this is mostly an image-building project,” admitted Vaneev. “I did not come here to earn money. I still had to do something in South Ossetia, and I do not exclude the possibility that this will be my only project here.”
At the same time, experts noted that the project will have an important social role for the republic, which so far almost fully depends on supplies of meat products from Russia.