Broiler producer GAP Resurs may buy out the meat production complex Mercury APK Prokhladnensky in Kabardino-Balkaria

Rising prices for poultry meat stimulate the largest players to increase their portfolio of assets. The group of agricultural enterprises (GAP) Resurs, which ranks first in broiler production, can buy a complex with 10.5 thousand hectares of land in Kabardino-Balkaria, which was part of the holding of ex-senator Vyacheslav Derev. The potential for increased meat consumption and market consolidation remains, experts say.

A large broiler producer, GAP Resurs, can buy out the meat production complex Mercury APK Prokhladnensky in Kabardino-Balkaria, according to the bankruptcy register. Stavropol Broiler LLC, part of the group, offered 854.42 million rubles for the asset. and became the winning bidder. GAP Resurs declined to comment.

“Mercury APK Prokhladnensky” was part of the Mercury Agro holding of the family of the ex-senator from Karachay-Cherkessia Vyacheslav Derev. The company included a pig-breeding complex, a slaughterhouse, a feed mill and 10.5 thousand hectares of agricultural land. But the business ran into difficulties. In 2016, the ASF virus was detected on farms. And in 2019, the company began bankruptcy proceedings at the request of the Central Bank of the Ministry of Bank, which was then undergoing reorganization. Vyacheslav Derev himself was accused of VAT refund fraud in 2018, and a year later was released from custody (see “Kommersant” dated March 1, 2019).

GAP “Resurs” of Viktor Nauruzov in 2022 took first place in the production of broiler meat, producing 1 million tons of products in live weight, overtaking the Cherkizovo group of the Mikhailov family with 846 thousand tons, according to the National Union of Poultry Farmers. It produces meat products under the brands “Blagoyar”, “Dym Dymych”, “Rossiyanka”, and also produces sunflower oil and dairy products.

The Mercury APK Prokhladnensky complex will probably be used by GAP Resurs for poultry farming, says a local official. As follows from Rosstat data, Stavropol Broiler already has a Mercury division, located at the same address as the complex.

President of Agrifood Strategies Albert Davleev says that in conditions of saturation of the domestic poultry meat market, the issue of concentration remains acute, therefore both GAP Resurs and the Cherkizovo group continue the secret struggle for leadership in production volumes. According to him, a larger share makes it possible to obtain more favorable terms of supply to retail chains. And complexes in the southern regions of Russia, he continues, are optimal for increasing exports through the port of Novorossiysk. In addition, GAP Resurs could be interested in agricultural land, including for growing sunflowers for its own oil extraction plants, Mr. Davleev points out. Kommersant’s interlocutor in the industry believes that the complex in Kabardino-Balkaria could attract GAP Resurs primarily with its land bank.

According to Rosstat, the production of poultry for slaughter in January-July 2023 increased by 1.3% year-on-year, to 3.79 million tons, the production of chilled poultry meat – by 1.8%, to 2 million tons. And the prices for this meat continue to rise. According to data from market participants available to Kommersant, from the end of August to the end of September, average wholesale prices for a broiler carcass in the center of Russia increased from about 200 rubles. up to almost 210 rub. for 1 kg, for fillet – from 350 rubles. up to about 370 rub. for 1 kg.

The head of the National Meat Association, Sergei Yushin, notes that the draft federal budget for the coming years provides for an increase in expenses, including for salaries of employees of law enforcement agencies, industry and the public sector, and social programs, which creates the potential for increased consumption of meat, primarily poultry and pork. In addition, the expert notes, the demand for poultry meat from catering establishments in the mass segment continues to grow. And the position of the largest players in the industry, he points out, is far from dominant.

According to Sergei Yushin, there are still opportunities for consolidation in the market, since small and medium-sized players, despite the good price environment, today find it difficult to carry out the necessary modernization. And increasing meat production, he believes, should reduce the risk of demand exceeding supply.

Anatoly Kostyrev