Cargill to build chicken processing plant in Russia

by Bryan Salvage
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MOSCOW, RUSSIA — Cargill plans to build a chicken processing facility at its complex in Efremov, Russia, south of Moscow, at an investment of $30 million. It will have the capacity to produce 18,000 tonnes of further-processed chicken products a year for the Russian market. Construction is expected to begin in the fall of 2010 and it is anticipated the facility will be operational by the end of 2011.

The plant will focus on supplying high-quality chicken products, including Chicken McNuggets, for McDonald's restaurants in Russia. Cargill had been supplying the bulk of McDonald's chicken volume requirements in Russia from its facility in Orléans, France and the decision to make this investment is in line with McDonald's strategic choice of pursuing local supply in Russia. Cargill will also use this facility to develop business opportunities with other customers in the retail, wholesale and food service sectors in Russia.

"This investment is a good fit with Cargill's strategic objectives in Russia and enhances our ability to continue providing McDonald's with specific solutions for its business," said Jerry Rose, Cargill's corporate vice-president. "This poultry plant will support McDonald's decision to secure a local source of poultry supply in one of their fastest growing markets. It is another demonstration of the ongoing collaboration between our two companies, building on our longstanding global partnership."

Cargill said the chicken meat will be sourced from a number of selected Russian producers, and the company intends to develop local supply partnerships, ensuring that the chicken sourced meets McDonald's demanding quality, food safety and welfare requirements.

"Our meats business has been able to take advantage of experience gained during Cargill's many years in Russia," said Richard Maxfield, managing director of Cargill Meats Europe. "We are fortunate in being able to make use of synergies within our Efremov complex and also in being able to leverage valuable contacts and existing relationships built up by our businesses."

Cargill's refined oils business supplies oil to McDonald's restaurants in Russia from the Efremov site, and the poultry processing plant will be able to further benefit from on-site supply of oil for its production process.

Once operational, the new facility will initially employ around 75 people, with scope for additional employment opportunities, as the business grows.

Cargill began its activities in Russia in 1991 by opening a representative office in Moscow, although a prior trading relationship with Russian-based organizations dates back some 30 years. Today, aside from the company's significant grain and oilseeds activity, a large number of other Cargill businesses operate in Russia, in locations including Voronezh, Efremov, Krasnodar and Rostov. The company employs more than 1,700 people and is one of the most significant foreign investors in Russia with over $650 million invested in the local agriculture and food industries.
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