Viktor Nauryzov is building a food empire.

The poultry farm ceased operations in December 2021 after an outbreak of bird flu forced the culling of all its birds. The owner, Alexander Yaroshenko's Ural-Don Holding, decided not to resume production and put the facility up for sale.

Four years is a long time to complete the implementation of a relatively modern enterprise, where 90% of the poultry equipment was replaced in the early 2010s. This delay could be explained by the seller's inflated demands or by price hikes that make the investment too risky. It's possible both factors were at play.

Following the bird flu outbreak in 2021-2022, egg prices rose sharply in 2023, pushing production profitability to over 23%, reaching over 60% in some areas in the first quarter of 2024. The government took measures to reduce prices: import duties on equipment and eggs were reduced to zero, EXPORT restrictions were introduced , eggs were included in the list of socially significant products, and market participants were forced to enter into agreements to curb trade markups. These measures coincided with the results of increased egg production during the high price wave of 2023-2024, leading to market glut. Media reports from producers indicated that, with a production cost of around 80 rubles per dozen eggs, retailers are now offering only 50 rubles.

In such conditions, acquiring a poultry farm is risky, especially for a company that has never produced commercial eggs. GAP Resurs is the country's largest broiler MEAT producer, with a production capacity of 107 million tons in 2024. The company operates egg production facilities for broiler farming, but these are entirely different chicken breeds than those used for table egg production. Broilers and laying hens have different husbandry practices, feeding regimens, and product distribution systems. Viktor Nauryzov's holding company's acquisition of the poultry farm can be explained by his desire to build a "food empire," in which profitability takes a backseat to the goal of maximizing production diversification.

Classic holding companies are structured either vertically or horizontally. A vertical holding includes companies along the production chain, for example, from iron ore mining to the production of finished shovels. A horizontal holding consists of companies at a single technological level, for example, solely steel mills that purchase ore from the mining industry and sell their steel to rolled steel producers. Each option has its advantages and disadvantages.

For holdings like "production empires," connections between enterprises aren't essential, although they're not prohibited. A holding empire can include any number of enterprises, from, say, wheat farming to a chain of modern dance schools. It's not even necessary for all of them to be consistently profitable. With significant scale and diversity of activities, some parts of the holding always generate profits, sufficient to keep other parts afloat for a while. The closest analogy is the state: subsidized regions aren't excluded from the state; on the contrary, the government tries to make them self-sufficient.

Viktor Nauryzov began building his empire with broiler and wheat farms. Today, the Resource group of agro-industrial enterprises includes production facilities for sunflower seeds, vegetable oil, and dairy products ( MILK , butter ,cottage cheese ), beef, pork, lamb, sausages, semi-finished meat products, and now there are also table eggs.

What's next? Most of the enterprises joined Viktor Nauryzov's empire due to dire financial straits, such as the Belaya Ptitsa and Samara Broiler poultry holdings, which were either in or near bankruptcy. After the start of the Second World War, the sausage giant Vladimirsky Standard lost the European market for marbled beef, for which there are not enough consumers in RUSSIA (few can afford meat at up to 10,000 rubles per kilogram). The major sunflower oil producer Niva faced debt servicing problems due to the high Central Bank interest rate. The Gulyai-Borisovskaya poultry farm stood empty for four years.

Today, Viktor Nauryzov's Resource, the nationwide leader among agricultural holdings in revenue growth (36% last year), has the potential to pursue deals of any scale in any market segment. According to several experts, the food market should brace for a series of difficulties for retail chains. Riding the wave of euphoria from rising household incomes and purchasing power, chain stores popped up everywhere, gobbling up the last remaining independent retail outlets. Now the situation has changed; consumers are switching to savings mode, and perhaps not all chains will be able to survive another fluctuation in profitability. Viktor Nauryzov will likely begin by acquiring regional retail chains, developing sales and supply chain technologies. And since the holding's slogan for dairy products is "Correct," one might expect the name "Correct" for the new chain as well.