Broilers are picking up eggs. Sibagro may expand its poultry division

Andrey Tyutyushev's Sibagro holding, the seventh pork producer in the Russian Federation, is expanding its poultry division. The company may buy out the complex of the Yasnogorskaya poultry farm in the Kemerovo region for the production of hatching eggs. This will allow Sibagro to reduce its dependence on imported products. But it will be difficult to find high-quality and affordable assets in the industry for further growth, market participants point out.

AG-UK LLC, the beneficiary of Sibagro Andrey Tyutyushev, at the end of March became the owner of Yasnogorskoye LLC in the Kemerovo region, follows from the Unified State Register of Legal Entities. This company operates the Yasnogorskaya poultry farm, which was previously part of the Siberian Province group. In 2007, the company planned to start producing 40,000 tons of turkey meat per year, but then Sibirskaya Gubernia abandoned this project, and in the 2010s, the group began to experience difficulties, its structures began bankruptcy proceedings.

At the end of 2019, the property of Yasnogorskaya was rented by the Krasnoyarsk poultry meat producer Yeniseyagrosoyuz for the production of hatching eggs. The capacity of the enterprise is 3 million units per year, Alexander Sychev, the general director of Yeniseiagrosoyuz, said earlier. He was the owner of Yasnogorskoye LLC before Mr. Tyutyushev, and Yeniseyagrosoyuz was going to buy the asset at auction. The property of Yasnogorskaya is being sold as part of a public offer at an initial price of 918.42 million rubles, applications will be accepted until July 18

Alexander Sychev confirmed that the management of the asset was transferred to Andrey Tyutyushev. The announcement of the vacancy of an expert in poultry farming of the Sibagro holding on the HeadHunter portal also says that the holding plans to launch a site for growing parent flocks in the Kemerovo region. Sibagro did not provide a comment.

Sibagro is one of the largest meat producers in the Russian Federation. Unites 11 enterprises, mainly in Siberia. The headquarters is located in Tomsk. According to the National Union of Pig Breeders, in 2020 Sibagro produced 237.5 thousand tons of pork in live weight, occupying 4.9% of the market, which corresponds to the seventh place in the country. Today, the only poultry farm in the holding, Tomskaya, includes poultry houses for about 2 million heads, produces about 40 thousand tons of poultry meat and more than 90 million eggs per year.

Russian poultry meat producers are still dependent on imported hatching eggs, which account for 15-20% of all used in the industry.

In March, market participants said at a meeting at the Ministry of Agriculture that a hatching egg costs more than 30 rubles. per piece against 16–17 rubles. per piece in September 2020, and the new prices for some poultry farms have become too high, because of which they may be forced to reduce production. Director General of Rosptitsesoyuz Galina Bobyleva notes that the purchase of Yasnogorskaya can not only provide Sibagro with hatching eggs, but also allow selling part of the products on the market. “The demand for them remains high,” she notes. In addition, the Ministry of Agriculture planned to subsidize part of the costs for the construction and modernization of facilities for the production of hatching eggs from 2022. Albert Davleev, president of Agrifood Strategies, estimates that the launch of mass production of hatching eggs could take up to six months.

Sibagro has recently been actively buying up assets in the industry. In 2019, the holding acquired two pig-breeding complexes in the Novosibirsk and Kemerovo regions, which were previously part of the KoPitania holding, and this year it bought out part of the assets of the Belgorod agricultural holding Promagro from the former deputy of the regional Duma Konstantin Klyuka. According to a top manager of a major poultry meat producer, this market may also offer interesting takeover targets, but transactions are complicated either by sellers' high price expectations or problems in the management of enterprises that are revealed in the process of studying assets.