Winemakers refused meat

Saturation of the market, tougher competition and low prices contribute to the exit of non-core investors from the poultry business. The family of Boris Titov, who owns a large wine producer Abrau-Durso Group of Companies, sold the Rzhev poultry farm to the second player in this market, GAP Resource. Consumption of poultry meat may grow amid the crisis, but business efficiency depends on scale.

The family of Boris Titov sold the Danton-Ptitseprom poultry meat producer to one of the largest players in this market, GAP Resource, Kommersant was found in the Unified State Register of Legal Entities. Changes in the composition of the founders of Danton-Ptitseprom were made on November 7. Pavel Titov told Kommersant that a non-core asset was sold, without disclosing the details of the deal. The representative of GAP “Resource” declined to comment.

Danton-Ptitseprom manages the Rzhev poultry farm in the Tver region with a capacity of more than 20,000 tons of broiler meat per year. It produces semi-finished products, sausages, smoked meats under the brands “Rzhevskoe Podvorye”, “Kur-kuma”, “Kudashka”. Revenue of Danton-Ptitseprom for 2021 increased by 33%, to 3.3 billion rubles, net profit – 39.9 million rubles. against a loss a year earlier.

The main business of the Boris Titov family is the Abrau-Durso Group of Companies, one of the largest producers of sparkling and still wines in Russia. According to Kommersant’s sources in the market, the former owners have long tried to sell Danton-Ptitseprom. One of Kommersant’s interlocutors believes that the business could cost about 500 million rubles. excluding debt, also the poultry farm is likely to need modernization. But another Kommersant source insists that the enterprise is in good condition.

GAP “Resource” Viktor Nauruzov in 2021 was the second producer of poultry meat in Russia after the Cherkizovo group of the Mikhailov family. Over the past year, these two groups produced 808 thousand tons and 813 thousand tons of broiler meat, respectively. In addition, GAP Resurs and Cherkizovo are the most active participants in M&A transactions in the industry. As sources told Kommersant, GAP Resource agreed in the spring to purchase the assets of KoPitania Group, including a poultry farm with a capacity of more than 40 thousand tons per year. And the Cherkizovo structure applied to the Federal Antimonopoly Service for preliminary consent to the acquisition of the enterprises of the Healthy Farm Group of Companies and the Russian Grain Group of Companies, which Trust Bank plans to put up for auction.

The President of Agrifood Strategies, Albert Davleev, notes that the current situation in the poultry industry contributes to the exit of non-core investors from the business. According to Rosstat, in January-September 2022, the production of poultry meat increased by 4.9%, to 4.81 million tons year-on-year. And wholesale prices for products today are lower than last year’s values. According to market participants, in September, a broiler carcass cost an average of 137 rubles in wholesale. per 1 kg, and fillet – 222 rubles. per 1 kg, which is 10% and 15% lower than a year earlier, respectively.

According to Mr. Davleev, the main reason for the sale of the Rzhev poultry farm could be the desire of GAP Resurs to become a leader in the poultry meat market. According to him, in the conditions of increased competition, the State Joint-Stock Company “Resurs” and “Cherkizovo” are actively interested in high-quality assets being sold. The purchase of the Rzhev poultry farm, in particular, will give GAP Resurs a site next to the Moscow market, the expert adds. Marat Ibragimov, a senior analyst at Gazprombank, says that economies of scale are extremely important in the industrial production of poultry meat, and only large holdings can achieve the level of unit cost required to operate on the market.

The National Rating Agency (NRA) predicts that uncertainty in the economy could lead to an increase in the share of poultry meat in consumption, mainly due to more expensive and more dependent on imports of beef. This year, according to NRA estimates, poultry meat consumption could rise to 29-30 kg per consumer per year from about 27.7 kg in 2020. And, as follows from the presentation of Cherkizovo for the bond issue, there is still potential for consolidation in the Russian poultry meat market: the three largest players in the country account for 33% of the market, and in the US – 47%.

Anatoly Kostyrev