Cherkizovo plans to increase turkey production to 100 thousand tons per year

The Group sees significant potential for the development of turkey farming in RUSSIA

The Cherkizovo Group, one of the leaders in the production of turkey in Russia, plans to increase the output of this MEAT at the Tambovskaya Turkey enterprise to 100 thousand tons in the future. The company also plans to expand the product line under the Pava-Pava brand, including ready-to-cook and ready-to-eat products, according to the holding's 2020 report.

The opening of the second phase of the Tambov Turkey (a joint venture between Cherkizovo and the Spanish Grupo Fuertes) in the summer of 2020 was a response to the growing demand for dietary meat, which includes turkey products. it follows from the report that the complex will be fully launched by the middle of this year, and this will increase the production capacity by about 1.5 times to 85 thousand tons in live weight. It also clarifies that in 2020, the complex produced 41 thousand tons of turkey meat, which is 5% more than in 2019. The segment's revenue increased by 6% to RUB 7.1 billion.

“In 2021, despite the difficulties experienced by the industry, we will be able to continue increasing sales in all business segments,” Sergey Mikhailov, CEO of Cherkizovo Group, is quoted in the report as saying. The increase in sales volumes in the retail channel will be provided by key brands - Cherkizovo, Petelinka, Kurinoe Tsarstvo and Pava-Pava. This will be due to further improvement of the product line and entry into new categories of products with high added value, the share of which in the portfolio should increase from 60% to 80%.

The culture of turkey consumption in Russia continues to develop largely due to the interest in a healthy lifestyle, Cherkizovo believes. Thus, over the past 10 years, the consumption of this type of meat per capita has increased from 1 kg to 2 kg. Despite a two-fold increase, this indicator still lags far behind consumption in European countries, which indicates a significant market potential.

Any development of turkey production is great news, because turkey is a healthy meat, and demand for it today significantly exceeds supply, says Albert Davleev, president of Agrifood Strategies. In addition, turkey breeding is one of the niches that can be filled both at the regional and federal levels.

According to him, Tambovskaya Turkey is becoming a federal player for several reasons: firstly, because of the large volume of production, which allows it to sell products outside the Central Federal District. At the same time, the company does not interfere with the development of regional turkey breeders, because local brands also have a significant resource for meeting the needs of the population from Vladivostok to Kaliningrad. 

Secondly, most of the world's turkey is produced for use in deep processing (sausages, ham). In Russia, the lion's share of this type of meat is represented by chilled, packaged cuts, Davleev told Agroinvestor. So the company has a good incentive to develop production specifically for deep processing.

According to Cherkizovo, in 2020 the average selling price of a turkey increased by 3% to RUB 173.98/kg. The high demand from trade networks and consumers has been preserved. Davleev also notes that prices for turkey meat remain relatively stable - at the level of last year. True, they are expected to grow during periods of active demand: with the beginning of the barbecue season and before the New Year. More and more people prefer turkey to other types of meat: turkey kebab is sold on a par with pork and chicken, although the volume of turkey production is much and incomparably less. This is due to the trend of the population's desire for a healthy diet, the expert says.

However, turkey farming in Russia is still faced with the lack of hatching eggs and breeding base, continues Davleev. Although today there are not enough hatching eggs to destabilize the industry. Bird flu has reduced supplies of poults and hatching eggs in Europe, but much of the eggs are imported from CANADA, where the flu situation is good this year, he said.

Now the resources of hatching eggs in Russia are generally stable, but almost 80% of them are imported. In fact, Davleev says, there are only three second-order breeders in Russia: a very small parent flock in the Tyumen region, which is used for the own needs of the Morozovskaya poultry farm, there is also Turkey Dvor in the Rostov region and Aviagen Torkeyz in the Penza region ( project of the largest genetic supplier Aviagen Turkeys). Their total capacity is no more than 10 million eggs per year, with the current requirement of 30 million. In five to seven years, the need for hatching eggs will increase to more than 60 million.

The attention of the Ministry of Agriculture and the government to the development of breeding poultry, especially in turkey breeding, is very important, Davleev draws attention. Own breeding base will not get rid of the factors associated with avian influenza, but will allow, if necessary, to expand the circle of suppliers. It is likely that with the scaling of production, the cost of production of Russian hatching eggs can be equal to imported ones, and taking into account delivery and customs duties, which will increase from 5% to 10% in 2020-2023, the final cost may become lower than that of imported products . Then import substitution will occur in a natural economic way, and not through restrictions, the expert concluded.