“ULYBINO” POULTRY FACTORY PLANS TO PRODUCE UP TO 17,000 TONS OF DUCK MEAT WHICH WILL BE SOLD IN THE MARKET OF SIBERIA, RUSSIAN FAR EAST AND ASIA.
THE PROJECT STARTUP WILL REQUIRE 4.2 BLN ROUBLES
“Ulybinskaya” poultry factory, established in 2016, intends to invest 4.2 bln roubles in the construction of 55 production facilities for duck feeding, incubator, poultry slaughtering and further processing. The parent stock will be bought from France. Around 30% of the total amount of 4.2 bln roubles will constitute the investor’s own funds, while the rest will be provided in the form of credit resources. The new poultry factory will be able to produce up to 17,000 tons of duck meat with a view to tap the markets of Siberia, Russian Far East, Asia, and particularly China. Furthermore, the new duck farm, the construction of which will be started in 2017, will create 400 jobs.
Dmitriy Lymischenko, Director General of “Ulybino” poultry factory, said in an interview to TASS that the investments in the factory construction would pay off in eight years. According to him, the animal production unit development, particularly the duck farming, will use the production capacity of “Vega” feed milling plant in Iskitim which is the founder of the poultry factory.
At the end of December 2016, the Investment Council of Novosibirsk Oblast backed the duck farm project. Dmitriy Lymischenko, the poultry factory’s director, said to the Council that there was a strong unsatisfied demand for duck meat in Russia. According to Lymischenko, the demand for duck meat was around 200,000 tons in 2015, while only 100,000 tons were actually produced.
At the same time, the Novosibirsk natives who are not used to duck meat may not respond to its appearance on grocery shelves. Timur Nigmatullin, financial analyst in GK “Finam” said in an interview to “Kommersant” newspaper that the duck factory construction was a risky project because the Novosibirsk natives were not used to consume duck meat, although the investor’s own fodder base would help him achieve “a significant positive synergistic effect”. “The duck meat market is narrow and specific. This type of meat is more expensive than chicken and even turkey meat, and the investor will have to habituate the Novosibirsk residents to the consumption of this product”, Daniil Hotko, expert in the Institute for Agricultural Market Studies says.
“Ulybino” poultry factory went into decline in the 90s, however, it was restored after that. Today, it is one of the largest feed milling plants in Siberia. According to the Unified State Register of Legal Entities, the poultry factory owners are Vadim Stepura and OOO “Vega” feed milling plant with the shares of 60% and 40% respectively. Vadim Stepura is also the sole owner and director general of the plant. According to Vadim Stepura’s company TD “Iskitimskie Korma”, in 2015, the profit of the feed milling plant with the capacity of up to 600 tons per day was approx. 2 bln roubles, while its net profit was 84.7 mln.
Nikolay Mochalin, Deputy of Novosibirsk Oblast legislature, was also sceptical about this project. He believes that the production of 17,000 tons of duck meat will lead to market reallocation due to the competition with poultry factories, and its effect on the region may be unpredictable.
Vasiliy Pronkin, Minister of Agriculture of Novosibirsk Oblast thinks that the region will only benefit from the duck meat production. “Throughout my work experience I had to gain insight into the competition related to certain products. Turkey meat, for example, is a direct competitor with pork. Duck meat is a competitor with beef. There is an imbalance in the diet of the Russian population. The population doesn’t get 28% of the necessary beef because it is unavailable. That’s why today the duck meat will not compete with poultry, it will fill the beef gap in the market”, the Minister said.
“Ulybino” will not come to an empty market. There are large poultry factories in Ural and Altai — Chelyabinsk “Utinye Fermy” (established in 2014), “Chicken-Duck” (reorganized on the base of “Pervomaiskaya” poultry factory in 2005), delivering their products to Novosibirsk stores. The meat production volume of “Utinye Fermy” is 6.5 ths tons, while “Chicken-Duck” produces more than 2,000 tons of duck meat. In addition to the duck meat production, the poultry factories also provide convenience foods, eggs and ducklings.
Duck meat may be also demanded in the market due to the Muslim community. In 2016 for example, the “Utinye Fermy” company was voluntarily certified in the committee on Halal standards of the Regional Spiritual Administration of the Muslims in Chelyabinsk Oblast, and obtained a production permit according to Halal certification.
Each duck farm aims at marketing their products from Ural to Russian Far East. The delivery of duck by-products to China is another important trend. For example, last year, the large duck meat producer GK “Evrodon” began delivering duck tongues and legs. Together with duck heads, they are considered as a delicacy in China. “Evrodon” delivers approx. 40 tons of these products to China per month. The financial director of “Utinye Fermy” said in an interview to “Delovoy Rostov” newspaper that their company also received requests for duck by-products from Chinese companies, and they were talking about container deliveries.