Miratorg invests billions into new distribution centre

The RUB10 billion ($160m) investment will create a distribution hub covering 38,000 sq m, with a capacity for 36,000 tonnes of various food products, said regional authorities in a statement on 26 June. The new facility is expected to be launched in 2019.

Dmitry Sergeev, press secretary of Miratorg, told GlobalMeatNews​ the new facility would allow the company to significantly raise its supply volumes to supermarkets in the city of Moscow and the surrounding region.

The new distribution centre would initially deal with highly processed goods, such as meat by-products and chilled ready-to-eat foods, Sergeev said. It would also provide storage, processing and logistics services for a wide range of other food items.

Sergeev added that Miratorg hoped the centre would allow the company to increase supplies of high-quality products to the regional market, benefiting local consumers. However, the company was not prepared to forecast by exactly how much its share in Moscow’s meat market could change as a result of the project.

At the moment, Miratorg produces chicken, pork, beef and, by the end of 2018, plans to launch lamb products, according to Sergeev. The new distribution centre would handle all kinds of meat, including products supplied by other companies.

More distribution centres needed in Russia​

According to Russia’s Ministry of Agriculture, the country needs more distribution centres, due to the vast territory covered by the country. Building such facilities could help meat companies cut the price of their products in target markets by about 20%, reckoned Dmitry Feyduyshin, deputy director of the market monitoring department at the Ministry of Agriculture.

The main purpose of distribution centres is to reduce inventory losses, Feyduyshin said. These facilities could also solve storage problems and create better engagement for smallholdings in the supply chain in Russia’s meat market, Feyduyshin added.

As of mid-2017, Russia’s Ministry of Agriculture estimated that the country needed to build multiple distribution centres with a total capacity of around 2.7 million tonnes. That would significantly improve the effectiveness of the domestic food industry, and the meat industry in particular, it said.

Miratorg’s new distribution centre will be quite small compared to other similar projects in the Moscow region. For example, a distribution centre in Maximikha, in the Domodedovo district, currently under construction, has an investment cost of RUB40 billion ($650m) and is designed to store 150,000 tonnes of various food products. Nevertheless, Miratorg’s new facility is so far considered to be the largest built by a meat company in Russia.