MSP Issue 22

Regional News
Don't Count Your Chickens Before They Are
Hatched… Or They May Disappear
Russian poultry manufacturers find themselves in
an awkward situation – statistics show that they
are close to falling into the trap of overproduction.
As it turns out, the capacities of
Russian poultry farms already
exceed the domestic demand for
poultry (mostly chicken, of course).
One of the main reasons for that was,
of course, the crisis which led to the
reduction of the effective demand and
the consumption of chicken and eggs.
On the one hand, this is actually
not so bad because the import
substitution in the poultry industry
has proved to be real and not just a
slogan. This reality, however, is quite
harsh for the poultry manufacturers,
because in order to develop,
modernize their production, and
reimburse their loans, they not only
must not reduce but increase the
production volume of poultry and
eggs. And here they have only one
way out – they have to find countries,
except Russia, to which they can
export their products.
This is not so simple, of course,
because no one really needs
Russian chickens, but Russian
manufacturers have a chance to
get there and attract customers.
Otherwise, the industry may face a
number of bankruptcies, mergers
and acquisitions, which is not good
for the manufacturers and the entire
industry, not to mention the regional
authorities, because any processes
like that may lead to an increase in
social tension.
For this reason, the companies
must move from overproduction
to profitable export through the
cooperative efforts with the
authorities, otherwise, by the next
fall, some of the poultry farms in the
North-Western Federal District may
disappear.
 Source: www.meatinfo.ru
26 | MSP Magazine • October/November 2016