Cherkizovo, Russia’s second-largest producer of broiler meat, is poised to increase its production output in 2024, according to a company spokesperson speaking with Agroinvestor.
The anticipated growth is attributed to the optimization of operations in central European Russia and the expansion of assets in the Bashkiria Republic and Chelyabinsk Oblast in the Urals, acquired in late 2022.
“Forecasting exact production volumes for 2024 remains challenging due to the volatile external environment,” the spokesperson noted.
In 2023, Cherkizovo produced 986,000 tonnes of broiler meat (live weight), marking a 17.8% increase from the previous year. This growth was largely driven by the initial phase of expansion in Bashkiria and Chelyabinsk and the conversion of a turkey farm to broiler production.
A significant driver of demand in the Russian market last year was an increase in consumer incomes, which the company successfully met with its expanded production capacity.
Challenges on the Horizon
Despite these achievements, Cherkizovo faces hurdles due to geopolitical tensions. The supply of Western equipment, technology, and spare parts remains an issue. To mitigate these challenges, Cherkizovo is diversifying its suppliers and localizing some production processes within Russia.
Additionally, the Russian poultry industry is grappling with rising operational costs. In 2023, production expenses increased due to higher prices for packaging materials, increased transport tariffs, and labor costs amidst an acute personnel shortage.
Labor shortages have been a significant issue in Russia over the past two years, with a deficit of approximately 5 million workers, according to a December 2023 study by the Economy Institute under the Russian Academy of Science. Elvira Nabiullina, head of the Russian Central Bank, stated that the Russian economy is nearly depleted of available labor resources.
Cherkizovo is also focusing on protecting its poultry farms from animal diseases. “Our main goal for 2024 is to ensure biosafety to maximize output, implement an investment program to expand production, and minimize risks associated with the supply of materials and equipment,” the spokesperson concluded.
