Construction Starts on Cherkizovo's Elets Complex

RUSSIA - Cherkizovo Group has laid the foundation stone for the largest agro-industrial building project in the country.
calendar icon 30 June 2011
clock icon 4 minute read

At midday on 28 June 2011 in the city of Elets in the Lipetsk region, a ceremonial foundation stone for the unique poultry production complex was officially laid. The ceremony was conducted by the Head of the Lipetsk regional administration, Oleg Korolev, Cherkizovo Group Chairman, Igor Babaev and CEO of Cherkizovo, Sergey Mikhailov.

In his speech, Mr Korolev officially thanked Igor Babaev for his efforts in the successful realisation of a number of agro-industrial projects and for attracting investment to the Lipetsk region.

He said: "Today is the start of a building project worth almost 20 billion roubles – this is two-thirds of the annual regional budget. The project will have a great social impact and will speed up the social and economic development of Elets and neighbouring regions. The project will provide an additional 4,000 jobs in the region and all the necessary infrastructure will be built."

Mr Babaev made special mention of the importance of such a large-scale complex for Russia.

He said: "When operating at full capacity, the live-weight production of poultry will increase to over 500,000 tonnes – this is a large part of total Russian volumes today. The project will boost the development of agriculture in the Central Federal district of Russia and significantly contribute to securing self-sufficient food supply in Russia as targeted by the government."

In the course of the ceremony, an agreement was signed regarding the realisation of the investment project between the Lipetsk region administration, Special Economic Zones OJSC, the Elets administration and Kurinoe Tsarstvo OJSC.

The poultry production and processing cluster will include construction of the following facilities: an incubation site with capacity of 160 million incubation eggs per year; five broiler sites with capacity of 10 million poultry places; four parent stock and reproduction flock sites for 900,000 birds; a slaughtering and processing complex with capacity of 24,000 units per hour; a waste treatment and processing complex; multifunctional treatment and purifying facilities; a feed mill complex with a capacity of 90 tonnes per hour, which will include storage facilities for 300,000 tonnes of grain and an oil processing complex, which will provide an increase in feed output for the Group of approximately 512,000 tonnes per year and will increase storage capacity up to approximately 800,000 tonnes. The project also includes construction of office space, infrastructure and engineering facilities, including storage and warehouse facilities, housing and a logistics facility with capacity to store up to 50,000 tonnes of frozen products.

Production is expected to start in 2013 and the site aims to operate at full capacity by the end of 2015.

The total investment in the project will be 19.5 billion roubles, or approximately US$685 million, including VAT. Of that amount, 80 per cent is loan funds, with a 10-year tenure, provided by Gazprombank.

Mr Mikhailov, CEO of Cherkizovo Group, commented: "By launching this project, we enter a new level of production quality. Compared to the majority of poultry factories in Russia with 15,000 to 30,000 tonnes of poultry per year, Eletsprom will have a capacity of over 200,000 tonnes. By undertaking construction of a large-scale integrated complex of this kind, Cherkizovo will be introducing new standards of efficiency and competitive production for the future."

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