The Prodo group of top managers from the team of Roman Abramovich sold the Chikskaya poultry farm in Novosibirsk with a capacity of about 300 million eggs per year.
The buyer was Chelyabinskaya Poultry Farm JSC, and they can now raise egg production by 40%, to over 1 billion eggs per year. Prodo might stop making eggs because it's less profitable than meat production.
At the end of 2021, the Prodo Group sold the Chikskaya poultry farm in the Novosibirsk Region to Chelyabinskaya Poultry Farm JSC, according to the buyer’s message. Prodo confirmed to Kommersant that the deal was closed without revealing its terms. “Chikskaya” focuses on making eggs, with a capacity of about 300 million eggs per year. In 2020, the revenue of Prodo Poultry Farm Chikskaya JSC increased by 15.1%, reaching RUB 1.58 billion, while net profit decreased by 31.7%, to RUB 36.17 million, year-on-year. Poultry assets are valued based on annual revenue less debt, according to Agrifood Strategies.
As a result, “Chikskaya” could be worth up to 1.6 billion rubles.
Prodo is a major Russian producer of poultry meat, sausages, semi-finished products, and meat products. It was established in 2004 with funding from Millhouse, the asset manager of Roman Abramovich. Andrey Gorodilov owns 50% in Prodo LLC, while Yefim Malkin and Irina Panchenko, top managers from Mr. Abramovich’s team, own 25% each. In 2020, Prodo produced 192 thousand tons of poultry meat, ranking seventh in Russia, as reported by the National Union of Poultry Breeders. The group's consolidated financial performance is not disclosed.
According to reports, the Chelyabinskaya poultry farm is one of the top ten egg producers in Russia. In 2020, its output increased by 11.6% to 716.7 million units. It produces eggs under the brands Chepfa, Three layers, and its own trademarks Pyaterochka (part of the X5 Group), Magnit, Vkusvilla, etc. In 2020, the company’s revenue grew by 12.9%, reaching 3.23 billion rubles, and net profit increased by 88.8%, to 377.96 million rubles. The main owner is Pavel Kadushin. The office of Chelyabinsk Poultry Farm JSC did not respond to Kommersant’s request on January 9.
According to a representative of Prodo, the decision to sell the enterprise has been in the works for a long time, as egg production is not a core business for the group.
After the deal, Prodo will concentrate on developing its poultry and meat processing assets and enhancing its overall performance, the company stated. Agrifood Strategies President Albert Davleev indicates that current egg production profitability is at 3-5%, lower than that of meat poultry farming. Additionally, poultry farms focused on eggs and meat do not have synergy due to different production cycles and distribution channels, according to him. Consequently, major players tend to build integration around one category.
The deal between Chelyabinsk poultry farm and Prodo may enable it to boost egg production to 1 billion eggs per year. According to Galina Bobyleva, General Director of Rosptitsesoyuz, this matches the benchmarks of market leaders. The largest player, the Volzhanin poultry farm, produces about 1.5 billion eggs annually.
In general, Ms. Bobyleva notes, in 2021, egg production in Russia remained at the level of 2020 – 44.8 billion eggs.
The industry is also characterized by rising costs due to higher cost of resources, and the volume of egg production depends on demand, which remains stable, she points out.
