Cherkizovo boosts turkey production in Russia

A large project to produce Grade Maker turkey meat has been launched by the Cherkizovo Group at their production unit in Tambov Oblast, Russia with the overall capacity of 50,000 tonnes per year. In an effort to catch up with the rapid growth of popularity of so-called exotic types of poultry meat among Russia consumers.

Over the past 2 years, the country's demand for duck, turkey and quail rose by at least 15% on the back of overall reduction of meat consumption.

Turkey production and demand growth

Production of turkey meat in Russia last year rose by 34.9% compared to 2014 to 205,000 tonnes, according to official data of the country's Agricultural Ministry. Analysts of Global Reach Consulting agency estimated that over the past 10 years the production of turkeys in Russia increased 7-fold.

The head of the executive committee of the National Meat Association Sergei Yushin confirmed that turkey production has experienced an unprecedented jump in production, due to the rising demand. 10 years ago it was 200 grams per capita, whereas now it is 1.5 kg. This is still lower than, for example in US, which is 9 kg.

Reducing the price gap with chicken

According to Cherkizovo's CEO, Sergei Mikhailov, the important thing is that with the launching of the new project, turkey will be no longer a delicacy for Russian consumers. Several years ago in Russia, turkey cost on average twice as much as chicken, now the price gap is only 20%. This, in turn, could make consumption reach 2-3 kg per capita bringing the overall market size to 450,000–500,000 tonnes.

"We expect this meat to be popular not only among consumers, but also among meat processors.  Our factory has a favourable geographical location. It is closer than all our major competitors to the main sales market being just 350 km away from Moscow. We have a great synergy with the meat processing industry, where we expect turkey to compete with pork and beef," Mikhailov said.

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Opportunities in food sector and exports

According to the company's management, the first turkey will be delivered this autumn and will go first to the food service segment (hotels, restaurants, cafes). It is more attractive in terms of price compared to the open market. Also, since Grade Maker is a completely new breed for the country's market, the company aims to take advantage of this.

At the same time, the developing strategy of the company is to increase export sales to 20% of all sales. According to executives within Cherkizovo, export deliveries are very profitable as Russia currently has one of the world's lowest poultry prices.

In terms of poultry exports, the company will in the first instance aim for the Middle East, in particular Iran, Iraq and UAE.  Cherkizovo last year was approved for exporting chicken to UAE and currently are preparing the first export deliveries.

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