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OJSC Cherkizovo Grp CHE Cherkizovo Group signs a Cooperation Agreement



  OJSC Cherkizovo Grp (CHE) - Cherkizovo Group signs a Cooperation Agreement

RNS Number : 6740D
OJSC Cherkizovo Group
18 May 2012
 



 

 

                                       

 Cherkizovo group, spanish grupo fuertes and tambov region administration sign
                           a cooperation agreement

                                       

Tambov, Russia, 18 May 2012 - On May,  17 in Tambov, an agreement to build  an 
integrated turkey production complex was signed. This project will be  carried 
out by Cherkizovo Group  with Grupo Fuertes,  a large agro-industrial  company 
and the leading producer of turkey in Spain. More than EUR 100 million will be
invested in the development of the project. As part of the agreement, a turkey
meat production joint venture  between Cherkizovo and  Grupo Fuertes has  been 
set up called Tambov Turkey LLC. Hannes  Snellman acted as a legal advisor  to 
Cherkizovo Group.

Oleg Betin, Head of Administration of the Tambov region, Igor Babaev, Chairman
of Cherkizovo Group, Sergey Mikhailov, CEO of Cherkizovo Group, Tomás  Fuertes 
Fernández, President  of Grupo  Fuertes, and  Jose Fuertes  Fernández, CEO  of 
Grupo Fuertes,  took  part in  the  signing ceremony.  The  participants  also 
visited the land plot in the Pervomaiskiy district, where the complex will  be 
built. 

The new turkey production complex will be  developed on a 5000 ha site in  the 
Tambov region  of Russia.  The annual  capacity is  expected to  be  25-30,000 
tonnes of turkey meat in sellable weight, which may increase to 50,000  tonnes 
in sellable  weight  in  the  medium term.  Once  achieved,  this  would  make 
Cherkizovo the market leader in the fast growing and highly profitable Russian
turkey meat market.

The total planned  investment is  RUR 4.5  billion (including  VAT), which  is 
equivalent to over EUR 100 million at current exchange rates. The project will
be financed equally by  Cherkizovo and Grupo Fuertes  from existing funds  and 
through bank loans. The Tambov  regional administration has agreed to  provide 
the necessary infrastructure for the construction of the complex.

Head of Administration of the Tambov region, Oleg Betin said: "The entrance of
such big Russian and international  investors as Cherkizovo and Grupo  Fuertes 
in the Tambov region  once again proves the  attractiveness and high  agrarian 
potential of  our  region.  Under the  region's  legislation,  the  investment 
activities will  benefit from  governmental  support and  we  plan to  take  a 
versatile approach when providing support for this project."

CEO of Cherkizovo  Group, Sergey  Mikhailov said:  "Today we  are launching  a 
unique project.  Firstly,  the substantial  experience  of our  partners  will 
enable us  to  build  a  production site  of  European  standard  quality  and 
efficiency; secondly, Cherkizovo has  an effective distribution network  which 
will enable rapid and efficient delivery  of new products to Russian  markets. 
Support, provided by the  regional administration will  be fundamental to  the 
successful realization of this project. I  would like to personally thank  the 
Administration of  the  Tambov  region  and  governor  Oleg  Betin  for  their 
support."

President of  Grupo  Fuertes,  Tomás  Fuertes  said:  "We  are  starting  this 
important project by investing in the promising and rapidly developing Russian
market. The project will be carried out in collaboration with Cherkizovo Group
- a partner we trust  and with whom we are  ready to share our experience  and 
modern technology  in  turkey production.  We  believe that  Cherkizovo,  with 
support of  the Tambov  regional  Administration, will  be  able to  build  an 
effective production cluster  and in  three years, Russian  consumers will  be 
able to enjoy high quality turkey meat."

About Cherkizovo Group

 

Cherkizovo Group (LSE:CHE) is the largest meat manufacturer in Russia, with
2011 revenues of circa USD 1.5 billion. It is also one of the top three
companies serving Russia's poultry, pork and meat processing markets. Due to
its vertically integrated structure that includes grain storage facilities,
feed production, livestock breeding, growing and slaughtering as well as meat
processing and integrated distribution, Cherkizovo has consistently delivered
sustainable revenue and profit growth. Cherkizovo's strategy includes both
organic growth and investment in new projects, driving the consolidation of
the Russian meat market. Cherkizovo shares are quoted on the LSE and
RTS/MICEX.

 

About Grupo Fuertes

Grupo Fuertes is a  large Spanish holding company,  which consists of over  20 
companies, many  of which  are focused  on the  agro-industrial sector.  These 
include well-known companies such  as: Agrifusa (agriculture), Cefusa  (cattle 
breeding), El Pozo Alimentación (production  and processing of meat),  Procavi 
(production and processing  of turkey), Sediasa  (grinding and preparation  of 
food) and Fripozo (deep-freeze products) among others. Grupo Fuertes also owns
oil and gas company  Aemedsa, hotel managing  company Visoteles, and  managing 
company Profusa which is involved in development in south-eastern Spain. Grupo
Fuertes revenue is about EUR 1.1 billion. The holding employs 5450 people.  

Procavi is part  of Grupo Fuertes  and is  the leading producer  of turkey  in 
Spain with a  share of  over 43%. Procavi  has a  fully integrated  production 
system with  excellent  control  systems  at  all  production  levels.  Annual 
production  capacity  of  the  company   is  over  55 000  tonnes,  which   is 
approximately 7 million turkey  heads. Sales of the  company are over EUR  129 
million, with plans to double this in the medium term.  

 

For further information:

 

Investors / Analysts / Russian media

Alexander Kostikov                            Tel. +7 495 788 3232 ext. 5019

Head of Communications                        a.kostikov@cherkizovo-group.com

                                               
UK/international media
Tom Allison            Temple Bar Advisory    Tel: +44 20 7002 1080
                       (London)
Alex Money                                    cherkizovo@templebaradvisory.com

 

 

                                     ***

 

Some of the information in this press release may contain projections or other
forward-looking statements  regarding future  events or  the future  financial 
performance of the Group. You can identify forward looking statements by terms
such as  "expect,"  "believe,"  "anticipate,"  "estimate,"  "intend,"  "will," 
"could," "may"  or  "might"  the  negative of  such  terms  or  other  similar 
expressions. We wish to caution you that these statements are only predictions
and that actual events or results may  differ materially. We do not intend  to 
update these statements  to reflect events  and circumstances occurring  after 
the date hereof  or to reflect  the occurrence of  unanticipated events.  Many 
factors could  cause  the  actual  results to  differ  materially  from  those 
contained in our projections  or forward-looking statements, including,  among 
others,  general  economic  conditions,  our  competitive  environment,  risks 
associated with operating in Russia, rapid  market change in our industry,  as 
well as many other risks specifically related to the Group and its operations

 

 

 

 

                     This information is provided by RNS
           The company news service from the London Stock Exchange
 
END
 
 
MSCLVLFFLEFBBBK -0- May/18/2012 12:10 GMT
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