GAP Resurs may buy enterprises of the Kostroma company Shuvalovo

GAP Resurs (Blagoyar brand), which ranks first in the production of broiler meat, is strengthening its position in other segments. The group can acquire the enterprises of the Kostroma company Shuvalovo, which produces 10 thousand tons of pork and 2.5 thousand tons of sausages per year. Demand for sausages is growing, so analysts see potential for consolidation in this market.

The structure of GAP “Resurs” received preliminary consent from the Federal Antimonopoly Service (FAS) for the company’s acquisition of the Shuvalovo group, which specializes in the production and processing of pork and combines a site for the production of sausages and semi-finished products, a dairy farm and a feed mill in the Kostroma region. According to a Kommersant source on the market, per year the Shuvalovo enterprise can produce about 10 thousand tons of pork in live weight, 2.5 thousand tons of sausages and 10 thousand tons of milk. The land bank, according to Kommersant’s interlocutor, reaches 3 thousand hectares.

In the report of JSC Shuvalovo for 2022, the owners of the company are named Vladimir and Ninel Komin. GAP Resurs is probably already preparing to begin asset management. In February, a vacancy for a HR specialist with a location in Shuvalovo, Kostroma region, appeared in the profile of GAP “Resurs” on HeadHunter. GAP Resurs declined to comment; Shuvalovo did not respond to Kommersant.

State Enterprise “Resurs” of Viktor Nauruzov in 2023 took first place in the production of broiler meat, producing 1.04 million tons in live weight, according to the National Union of Poultry Farmers. It also grows lamb, produces sausages and other meat products, vegetable oils, and dairy products. The brand portfolio includes the brands “Blagoyar”, “Dym Dymych”, “Rossiyanka”, etc.

A Kommersant source estimated the possible value of the Shuvalovo business at 500 million rubles, based on the EBITDA of the group’s enterprises at 150–200 million rubles. in the last three years, net debt of 1–1.2 billion rubles. and the book value of fixed assets is 1.6 billion rubles. General Director of the National Union of Pig Breeders Yuri Kovalev notes that Shuvalovo shows good productivity results. In 2022, a focus of African swine fever was discovered at one of the Shuvalovo sites, the report says. As Mr. Kovalev explains, in modern complexes production at such sites can be restored after certain procedures.

Shuvalovo may become the first asset of GAP Resurs in pig farming. In 2022, Kommersant’s sources said that GAP Resurs was close to purchasing the assets of pork producer KoPitania Group of Companies. In the summer of that year, the FAS allowed GAP Resurs to acquire part of the assets of KoPitania. But, according to Kommersant’s source, the deal has not yet taken place. KoPitaniya did not provide a comment.

President of Agrifood Strategies Albert Davleev notes that GAP Resurs is striving to diversify its product portfolio and is developing advanced meat processing, for which it is considering the purchase of pig-breeding enterprises. The latter also have synergy with poultry farming complexes due to the mutual exchange of food resources, the expert points out. Director of Yakov and Partners Alexey Kletsko notes that the deal with Shuvalovo fits into the strategy of GAP Resurs to purchase local meat processors and may allow the development of competencies in pig farming.

According to Mr. Davleev, meat producers in the near future may be mainly interested in the domestic market due to difficulties with payments and logistics affecting exports. Meat and sausage sales in 2023 exceeded 2021 levels in absolute terms, with demand growing at double-digit rates in both categories, according to NielsenIQ. Although Kommersant’s interlocutor on the market notes that GAP Resurs may also have plans to expand exports – in particular, to the countries of Southeast Asia.

Rosselkhozbank, in a study of the M&A market in the agro-industrial complex, classifies meat processing as an industry with a low degree of consolidation, where the ten largest players occupy 20%, predicting new transactions for the acquisition of processing assets by pig and poultry farmers.

Anatoly Kostyrev