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Atria Invests in Pig Farming in Russia

by 5m Editor
23 December 2009, at 4:02pm

RUSSIA - Finnish meat processing company, Atria, has joined forces with the Danish company AS Dan Invest for pig production in Russia.

Atria will have a 26 per cent stake in the Russian company OOO Dan Invest, which is the owner of two pig farms: one in Krasnodar and one in Tambov.

The farms' production will commence in 2010-2011 and the estimated annual production volume is 180,000 slaughter pigs by 2013. The value of the project is about €40 million.

Atria's investment in this project is three million euro plus a subsequent €2 million after a certain production volume has been reached.

To secure its supply for locally produced pork meat Atria will also sign a delivery agreement with OOO Dan Invest. The deal is estimated to be closed in in the first quarter of next year.

With this agreement Atria secures a better supply and higher quality of locally produced pork meat to its Russian customers and consumers. Modern facilities together with latest feeding and surveillance technology enable production of high quality meat raw material.

The new investment will also increase Atria's possibilities to balance the proportion of imported vs. locally produced pork meat. Today Atria has one pig farm in Zaraisk, which already produces 55,000 pigs annually.

Meanwhile, Atria had previously announced that it aimed to reach a profitable business result in Campomos, its Moscow-based meat processing company, during 2010. However, despite positive development, the full-year business result of neither Campomos nor Atria Russia will be profitable in 2010.

Atria said that Campomos' profit development has been positive during 2009.

"Wwe forecast this trend to continue. The sales and marketing investments related to Campomos products that were initiated during 2009 will gain momentum next year," said an Attria spokesman.

"Atria Russia is investing heavily in the development of primary production and increasing production capacity. Atria and its Danish partners have started an important project in Russia to ensure the availability of local pork.

"Investments in the production of pork and the start-up of a new plant in Gorelovo in early 2010 will strengthen Atria Russia's future competitiveness. During 2010, the start-up of the Gorelovo plant will increase fixed costs by approximately €4 million a year. The start-up of production in the new plant will also cause some additional costs."