The import of “Bush legs” (the Russian term for chicken leg quarters from the United States) has recently been up to 67% and now the amounts are no more than 8%. Russian poultry farms successfully cope with the rest of the production volumes themselves.
Poultry farming in the Samara region is one of the most dynamically developing trends in livestock. There are several reasons for this. As a dietary product, poultry meat is traditionally in high demand among the population and the price remains relatively low in comparison with the cost of beef meat, pork and lamb. In general, the volume of poultry meat consumption is 42% of the total volume.
Accordingly, a great attention is given to this perspective industrial branch. In the year 2013, a decision of state support for the industry within the framework of departmental targeted programme “Development of Poultry Farming in Samara Region” is made for the following two years. The total amount of funds, which are planned to be allocated from the regional budget for implementation of programme activities, makes 2401,67 million roubles.
In conjunction with the recent ban on poultry meat import from western countries, Russian producers have received even more pleasant attention from the state. “We spend percentage subsidizing expenses for construction of slaughterhouses. There are programs to finance potato, pig, poultry, and dairy farming, specialized beef production, modernization and construction of greenhouse complexes,” has been said by Roman Nekrasov, who is The Deputy Minister of Agriculture and Food in Samara Region, in his speech at the Volga Agricultural Forum.
The ban on the import of agricultural products gives domestic manufacturers another chance to increase production and improve their financial status, since the pressure of imports upon the market is minimal. The new opportunities have not gone past the Samara enterprises.
“After the introduction of sanctions, meat price has increased and the stable income came,” commented Vladimir Ruzanov, who is the CEO of “Borskaya Indeyka” turkey farming and “Delikatesoff” meat innovation industrial plant.
“Due to a sharp jump in prices, local processing enterprises have switched to domestic producers, i.e. they rely on us,” adds Yuri Zaplatin – The Head of The Trade and Procurement Department of “Timashevskaya Poultry” Company. “As a result, the share of total domestic sales has increased.”
PRICES ARE RISING
‘One of the main issues today is grain and energy prices rise,” has been noted in the Ministry of Agriculture of the Samara Region. “Poultry industry is the most sensitive to such fluctuations considering that the production of animal feed uses the most expensive components.”
According to Timashevskoy poultry farm, the price of fodder rose by 35 percent last year and incubating egg price increased in 2 times.
However, the solution is in sight. As you can see, the currency has been already reduced,” said Vladimir Ruzanov. “Now we are negotiating with suppliers and there is an agreement to review the price after May 1st.”
Chicken producers are concerned about the increase of incubating eggs price and chicken rearing. Many experts point out that Russian poultry industry has lost its genetic potential in the late 90s because of meager funding. There used to be quite good chicken crossbreeds. Unfortunately, many crossbreeds that are used in the Russian Federation today are imported. If hatching eggs supplies and day-old chicks supplies for breeding stops in the future, the product performance of this industry will decrease for some time. Meanwhile, Samara poultry farms shoulder the financial burden.
“We buy eggs and chicks from Europe,” says Yuri Zaplatin from Timashevskoy poultry farm. How the appreciation of the euro in this case affected us, you could imagine. But it should be noted that despite everything, we have increased the selling prices to retailers by only 10%. And we do not give up our plans to expand production.
Some businesses have shrewdly refused to work with import suppliers and replaced them with domestic ones. For example, Togliatti poultry farm purchases chicks from a Russian company but the hatching eggs are produced by themselves.
HOPING FOR SUBSIDIES
In principle, the solution to the problem of import substitution assigned to the regional governments is near. And this is only possible due to the increase of production volume, which is traditionally produced in the region. However, this will not be possible without a good investment and good staff. As for the first question, Samara poultry farmers manage to deal somehow but they have a lot of difficulties.
“We have always worked with our own capital.” Russian Agricultural Bank announced that the situation changed. “To be honest, the bank interests of 25% scare us. Of course, subsidies have been promised. The refinancing rate today is 14%, after deduction is still a lot. Of course, it will be easier.”
Despite the difficulties in obtaining credits and high interest rates, the companies continue to develop. Timashevskaya factory currently produces 35 thousand tonnes of meat a year but they are planning to increase production capacity.
“We are running a third factory production site this summer and it will increase production by 15%”, continues the theme Yuri Zaplatin. “A poultry processing plant with capacity of 300 tonnes per day is planned to be built in 2016.”
The construction of Sergiyevskaya poultry farm is actively going on. In March, the governor of the Samara Region Nikolai Merkushin discussed the implementation of the project with The Deputy Prime Minister of the Russian Federation – Arcady Dvorkovichem. As it is known, appropriate negotiations about the joint implementation of the project will be carried with the Foreign Trade and Investment Bank in the near future. The allocation of 3,5 bns of roubles will be discussed. It is not excluded, that Sergiyevskaya poultry farm will be included in the list of high priority projects for financing. “If we receive the required amount of funds this year, we will be able to complete the construction of the poultry factory by the fall of 2016,” said Nikolay Merkushkin informing mass-media about the results of the meeting. As it has been noted in the Ministry of Agriculture, “the government does not also abandon earlier plans to restore Podbelskoy and Krotovskaya poultry farms. Implementation of these projects will begin after the completion of the poultry farm in Sergiev district.”
Samara poultry breeders increase not only the production volumes but also the geography of their sales. The production of Timashevskaya poultry farm can be already seen on the shelves of the adjacent areas of Ulyanovsk and Orenburg. Management plans include signing agreements with Kazakhstan and entering the markets of Urals and Moscow.
“Borskaya Indeyka” turkey farm is also entering new markets. “We cooperate with neighbouring regions like Tyumen. Moscow became interested in us,” said Vladimir Ruzanov. “It must be said that there are already a number of Russian manufacturers that even came out on the European market.”
Such successes, of course, are delightful. But in the end, everything depends on the professionalism of the industry workers. But the personnel issue is very serious.
In connection with the failed positions of vocational training, the shortage of qualified personnel has consistently been felt in our branch more than one and a half generations,” admits Andrey Sharuev- the director of Tolyatti integrated poultry farm. We will engage and deal with their professional qualifications by training them on the spot.