Cherkizovo Acquires Land in Tambov

RUSSIA - Cherkizovo Group OJSC, one of Russia's leading integrated meat producers, has acquired 28,212 hectares of agricultural land in the Tambov region.
calendar icon 18 March 2008
clock icon 3 minute read

The acquisition of this land is in line with the Group's strategy to be the leading player in the Russian meat production market and to create substantial additional value for its shareholders.

The land is situated in the "Black Earth" farming region, generally known as a centre of agricultural industry in Russia because of the quality of land in the region and other favourable natural conditions, and is part of a green field agricultural project with the Tambov Region Administration (TRA).

The land is located close to the Group's industry leading Tambov and Lipetsk pork production complexes.

The Company believes that the acquisition of the land provides significant strategic benefits for the Group, including the possibility of being able to secure, potentially on a long-term basis, feedstock at a lower cost.

The Group is in discussions with NAPKO, a specialist crop raising company, to lease part of this land to NAPKO and purchase feedstock from them. The acquisition of the land is also in line with the Group's objectives to generate attractive returns on invested capital, including leasing out unused land to other agricultural farming concerns.

Cherkizovo management said that the land also has significant potential to increase in value.

Igor Babaev, Chairman of Cherkizovo Group, said: "We are delighted to have acquired this land in the Tambov region. This project is fundamental to the Group's strategic development programme and will, we believe, create significant shareholder value. We look forward to working with the TRA to develop this land and deriving the long-term strategic and financial benefits from this acquisition."

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