24 Jan 2023 09:15

Cherkizovo boosts exports 25% in 2022, half of shipments to China paid for in yuan

MOSCOW. Jan 24 (Interfax) - Cherkizovo Group , one of Russia's largest meat producers, increased exports by almost 25% to more than 100,000 tonnes in 2022, the company told Interfax.

As in previous years, chicken meat accounted for most of the exports, with shipments growing by more than 20% to about 75,000 tonnes.

"The strongest growth in export sales in 2022 was in the segment of sausage products and turkey meat products - shipments increased by about a third to nearly 10,000 tonnes in each category. Pork shipments to foreign markets totalled approximately 15,000 tonnes, which is about 15% more than the 2021 figure," the company said.

"The increase in the share of products with high added value in the export portfolio, foremost in the sausage product category, enabled Cherkizovo to achieve export revenue growth of more than 40%," the company said.

Most of the group's exports went to China, Kazakhstan and other Eurasian Economic Union (EAEU) countries, as well as to Saudi Arabia and Vietnam. Up to 50% of export contracts to China were paid for in yuan.

The group acquired new customers in the course of the year, both by expanding its customer base in countries to which is regularly exports and by entering new markets, such as Qatar and Angola, among others. Exports of halal products to countries with Islamic customs grew and already accounted for more than 10% of exports by volume, and there is still potential for strong growth, Cherkizovo said.

The director of exports at Cherkizovo Trading House, Yelena Volgusheva said the group's main export markets in the next few years will continue to be China, the EAEU and Saudi Arabia.

"However, the company is aiming to further diversify the geography of exports and make regular shipments to countries in the Persian Gulf, Africa and Southeast Asia. Specifically, we are interested in opening access to the markets of the Philippines, Malaysia, Indonesia and other countries," Volgusheva said.

The company said it now exports to more than 20 countries, although in 2022 it faced serious difficulties, like other Russian exporters.

The main problems were due to leading international container line operators, which accounted for more than 60% of container shipments, leaving the charter market, Cherkizovo said.

"This led to a shortage of containers, reduction of destinations, an increase in delivery times and, consequently, a very substantial increase in logistics costs. For example, on the markets of developing countries, such as Africa, there is demand for inexpensive products, the profit on exports of which is minimal, so shipments often become commercially unviable - even with a minimal profit, prices will be uncompetitive compared to the offerings of leading world exporters - the United States, Brazil, the EU and Turkey," Cherkizovo said.