Little enthusiasm for bankrupt Russian pig companies

Ariant wanted to increase its annual capacity from 50.000 tons of pork to 180.000 tons of pork in 2020. The costs for the project, which has been postponed, are likely to amount to several hundred million euros. There are several large-scale pig farms for sale in Russia, but there is not much interest in taking over the bankrupt assets.

Saturated market
According to the Russian Pork Producers Association, the decreased profitability is the result of the saturated market. As a result, profitability has been halved. Despite the enormous consequences of the African swine fever in China, the Russians take into account that returns will not improve.

In December, the association reported that it was expecting enormous growth in annual production. The meat company came earlier Cherkizovo in the news, because the Russian group announced that it plans significant investments in pig farming projects. This is due to the expected increase in demand from China. However, these plans seem to be at odds with the general sentiment in the Russian pig farming industry.

According to figures from the Russian government, pork production at the 20 most important slaughterhouses in Russia increased in 2018 by 321.190 tonnes to 4.123 million tonnes of pork (live weight), compared to 2017. This is an increase of just under 8%. Domestic pork consumption amounted to 3,315 million tons in 2018, meaning Russia is self-sufficient on paper. 

Cross the bill
The disappointing return is a blow to various investors, who assumed that Russian pig farming would be a highly profitable investment. Investment experts estimated Russian pig farming as the second best investment in the Russian economy in 2018. The payback period for investment projects would be only 1 years.