Russia’s Cherkizovo, Miratorg reveal meat export plans

Russia's Cherkizovo wants to increase its exports fourfold by ramping up production

Russian meat giants Cherkizovo and Miratorg have revealed strong immediate targets for export growth amid even more ambitious long-term plans to grow international trade.

In 2017 Russia’s agricultural holding Cherkizovo plans to export products for some US$50 million, or 5% of company’s total revenue, the company’s CEO Sergey Mikhailov revealed at the St. Petersburg International Economic Forum. The similar target in late May has been stipulated by Viktor Linnik, CEO of Miratorg, who during press-conference said that up to 5% of company’s turnover or US$100 million this year would account for export.

While the companies’ interim export strategies seem strong enough, long-term plans look much more ambitious. Mikhailov said that by 2020 his company intended to increase export nearly fourfold, bringing it to about 20% out of Cherkizovo overall sales.

Linnik said Miratorg would be able to raise export to nearly US$300m – 500m a year, but only if Russia’s meat exports to China could be authorised. He also recognised the importance of export negotiations with Japan, where all types of meat produced by Miratorg could be delivered “including poultry, pork and beef”.

Hard currency drives hard drive

Both executives emphasized that strengthening of the exchange rate of the Russian ruble against other hard currencies had damaged export development. According to official information, the exchange rate of the ruble jumped by 28% against the US dollar, from 79 rubles per dollar in February 2015 to 57 rubles in June 2017.

Linnik called the ruble “the limiting factor” for export deliveries, adding that his company hoped there would be no further rise in its exchange rate. Mikhailov admitted that a strong ruble did not help the company’s export programme, so in the coming two to three years Cherkizovo would develop export, but still focus primarily on domestic sales.

Meanwhile, it is not yet known if the companies expect livestock disease threats, such as highly pathogenic avian influenza and African swine fever to harm export plans. Elena Trifonova, the official spokeswoman of Cherkizovo told GlobalMeatNews the company would not comment further on export plans, while Dmitry Sergeev, the official spokesman of Miratorg, was unavailable for comment.

Russia to export millions tonnes of meat

Speaking at the St. Petersburg International Economic Forum, Russia’s agricultural minister Alexandr Tkachev revealed that the ministry planned to start subsidising exports of agricultural products. That would include meat from the country.

He said Russia could become a major exporter of food products, delivering nearly 50% of all production manufactured in the country for export. In the meat industry this would mean exporting two to three million tonnes per year, according to the current production forecasts.

The ministry estimated that in the coming five to seven years, Russian meat exports should grow at an average annual rate of 15%, eventually reaching nearly US$40bn – US$50bn a year.

Russian officials have repeatedly claimed that plans to develop meat exports would be implemented primarily by industry, in other words the country’s largest agricultural holdings.

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