Tambov pig is not a friend to them – Newspaper Kommersant No. 171 (7372) of 09/16/2022

Goodvalley, a major pork producer headquartered in Denmark, has sold its Russian business, the Rasskazovsky pig-breeding complex in the Tambov region. The owner of the enterprise with a capacity of up to 20 thousand tons of meat per year was a local grain producer and trader. Against the background of the rising cost of building new complexes, interest in buying existing enterprises should grow.

The Danish Goodvalley A/S has ceased to own the Russian division of Goodvalley, which operates the Rasskazovsky Pig Breeding Complex (RASK) in the Tambov region, follows from the data of the Unified State Register of Legal Entities. Since September 12, 99.99% of Goodvalley has been owned by the local Agro-Vilion LLC, which grows malting barley, wheat, sunflower, soybeans, corn, and peas.

Goodvalley is a major European pork producer headquartered in Copenhagen. At the end of 2020, he managed 35 farms in Poland, Ukraine and Russia, as well as 42 thousand hectares of land. In Poland and Ukraine, Goodvalley is the second pork producer, according to the report. The Russian market accounted for 9% of Goodvalley’s revenue.

RASK, according to its own data, sells more than 100 thousand heads of pigs per year, manages over 6 thousand hectares of land, as well as a feed complex with a capacity of 20 thousand tons. According to the director general of the National Union of Pig Breeders Yuri Kovalev, RASK produced up to 20,000 tons of pork per year. In 2021, RASK’s revenue increased by 37%, to RUB 1.98 billion, and net profit to RUB 296.2 million.

Goodvalley “Kommersant” did not answer. Maxim Kopnin, CEO of Agro-Vilion, confirmed the deal, refusing to comment further.

Two interlocutors of Kommersant in the market admit that Goodvalley’s exit from the Russian business was spurred by the military actions of the Russian Federation in Ukraine. According to another Kommersant source, Goodvalley had previously considered the possibility of selling RASK due to increased competition in the local market.

Major specialized investors were also interested in Goodvalley’s assets in Russia. In July, an application for the purchase of a division of the company to the Federal Antimonopoly Service was filed by the structure of the Cherkizovo group of the Mikhailov family. Cherkizovo confirmed to Kommersant that they were interested in acquiring RASK, but did not agree with the seller on the terms of the transaction.

The head of the National Meat Association, Sergei Yushin, points out that in the face of the growing cost of building new complexes and possible problems with the import of equipment, the purchase of existing enterprises is becoming the best way to expand business. According to Yuri Kovalev, the construction of a complex with a capacity comparable to RASK from scratch today will cost about 2.5-3 billion rubles. In this case, the buyer, probably, could also be interested in increasing the land bank, given that it is not easy today to find 6 thousand hectares in the Central Black Earth Region in one lot, Mr. Yushin adds.

The director of Sovecon, Andrey Sizov, notes that the buyer of RASK is a fairly well-known agricultural trader with experience in the Central Black Earth Region, therefore, if necessary, he can provide grain supplies for meat production. On the other hand, the expert continues, there are no special prospects for the Russian pork market now: supply is growing, consumption is stable, and exports are not significantly increasing.

According to the Ministry of Agriculture, in the first half of 2022, pork output increased by 5.7%, to 2.1 million tons year-on-year. Wholesale prices for this meat by the end of August were at the level of 199 rubles. for 1 kg against 123.5 rubles. for 1 kg a year earlier. According to Sergey Yushin, for small enterprises, especially those that do not have their own feed base, sale in the current conditions is becoming one of the main scenarios.

Anatoly Kostyrev