Overproduction of pork in Russia this year is estimated at 150-200 thousand tons, said the General Director “Rusagro” Maxim Basov on the conference call. The main promising markets for Russian pork are Belarus, Hong Kong and Vietnam, but to take out the entire amount of open export routes is not enough. The alternative is to sell more to Russian consumers, but you need to make an interesting proposal, including the expense of marketing and prices, said Bass.
To predict when the Russian pork will open the Chinese market, he does not undertake because it is “completely political” question. “Only XI Jinping and Vladimir Putin know it will be made or not. I am sure that President Putin will achieve this by focusing on this issue, but I don’t think he is priority number one, number two or number three now,” said Bass.
Rusagro is a major producer of sugar, pork, mayonnaise, butter and margarine. The group has more than 35 farms, 9 sugar mills, oil extraction plant and oil factory. By the end of 2019, the net profit of Rusagro’s IFRS decreased by 24% to 9,709 billion. Revenue rose 67% to 138,172 billion.
In 2019 Rusagro increased pork production by 19% compared to 2018, up to 243 thousand tons (in live weight), the sale of pork products – by 23% to 208 thousand tons. Revenues beef division increased by 16% to 25.8 billion rubles, EBITDA decreased by 30%, to 4.9 billion rubles.
In 2019, Russia produced 3.9 million tons of pork in slaughter weight, which is 5% higher than in 2018. The production growth was provided by increase in the industrial segment. Three players in the market – “Velikoluksky pig-breeding complex”, “Cherkizovo (MCX:GCHE)” and “Rusagro” – expanded production 0.1 million tons, reported in the annual report “Rusagro”.
Exports of pork and offal from Russia in 2019 increased by 16%, to 106 thousand tons. 35% exported from the Russian Federation of pork was sold to Hong Kong.
According to the National Union of pig breeders, in 2019 “Rusagro” was ranked fourth in the ranking of the largest pork producers with a market share of 5.6%.