Zarechnoye increases beef exports to China

Zarechnoye will supply 675 tons of marbled beef to CHINA by October . The company signed a corresponding agreement with Shandong Hi-Speed ​​Airport Logistic Development Co. Ltd., a subsidiary of Shandong China High Speed ​​Group (SDHS), the largest state-owned enterprise in Shandong Province. The buyer will receive 25 containers of MEAT - 28 positions of cuts of carcasses of corn-fed bulls. In the future, the parties are considering an increase in supplies.

“Establishing cooperation with such a significant partner can become a catalyst for attracting other leading Chinese companies,” said Konstantin Polevoy, commercial DIRECTOR of Zarechny. “During the two years of working with China, four trading companies have become our regular customers, there is definitely potential for expansion.” Development Director of SDHS Wang Ziyin notes that for at least five years, imports of Russian beef to China will continue to grow at a high pace, so the company was looking for a partner for long-term cooperation. “Today there is no doubt that marbled meat from Voronezh is a worthy alternative to grain-fed Australian marbled beef,” he said (both quotes are from a press release from Zarechny).

Chinese consumers are increasingly looking for beef ribs, brisket, and steaks instead of pork. Beef is in demand, but culinary traditions have remained unchanged - boil, stew, bake meat, a representative of the press service of Zarechny told Agroinvestor. “The priority is fatty meat, it is these cuts that are not particularly in demand in our domestic market. Therefore, our Chinese partners were looking for quality marbled beef, and not special steak meat. We will send SDHS all parts of the carcass in boneless lumpy form,” she specified.

Zarechnoye was certified for the supply of products to China in January 2020. If last year the company sent trial lots, now it has established regular sales. “Among our partners are four trading companies that make purchases for wholesale distribution channels and food service,” says a company representative. At the same time, the planned EXPORT of Zarechny products is only about three years old, the company began cooperation with the CIS countries and Kazakhstan. “The global beef market is dominated by Argentina, Brazil, Australia and the US . Preliminary negotiations with partners convince us that Russian marbled beef is competitive,” says a company representative. “Now work is underway to develop the Middle East market, such countries as Saudi Arabia, the United Arab Emirates, Qatar are in priority.”

These countries have high requirements for the safety and reliability of animal products, including through accreditation with official and regulatory bodies. The control of compliance with the established rules is strict, including halal requirements. So, for example, Zarechny had to change the procedure for slaughtering livestock to meet halal standards, a company representative shares. “The absence of GMOs banned in our country favorably distinguishes us from producers in Brazil or the usa. This is also one of the requirements for halal,” she adds.

A more active increase in supplies is hindered by the remaining restrictive barriers, complex strict procedures for accessing the markets of other countries, fierce competition, a representative of Zarechny lists. In addition, Russian producers must provide consumers within the country. “In RUSSIA, beef consumption has been declining for the second year in a row, while demand for marbled beef is growing. Definitely, our market is far from saturation, - says the representative of Zarechny. - The capacity of our enterprise is 40 thousand tons per year. Buyers abroad are ready to offer better conditions, but we keep exports at a level no higher than 15-20%.”

Meat export from Russia is growing this year. As of mid-June, the export of pork and pork offal, excluding supplies to the EAEU countries, amounted to almost 81 thousand tons (an increase of almost 32%), shipments of beef and offal increased 3.3 times to 12.3 thousand tons, meat exports poultry decreased by 7.1% to 98 thousand tons, HEAD of the National Meat Association Sergey Yushin told Agroinvestor earlier. The main task for Russian exporters of meat products now is to diversify the geography of supplies, he is sure.

The Zarechnoye group of companies was created and managed by Sergey Nitsenko. The holding companies are engaged in the cultivation of fodder crops, breeding and fattening of cattle, meat processing. The meat cluster of the group is located in the Voronezh region. This is a pilot investment project for the formation of a vertically integrated production of marbled beef in Russia, created in 2010. The amount of financing amounted to 24 billion rubles.