Charoen Pokphand Foods to acquire Agro Invest’s Russian poultry business

Thailand-based agro-industrial and food conglomerate Charoen Pokphand Foods (CPF) will acquire the Russia-based poultry business of Agro Invest Brinky for an undisclosed amount.

The acquisition is likely to be carried out in two phases. CPF will acquire an 80% stake in the company by the end of 2015, and the remaining stake by the end of 2018.

The company said that it will acquire an 80% stake in CJSC Poultry Production Severnaya and CJSC Poultry Parent Stock Production Woyskovitsy, both of which produce feed, and are involved with breeding parent stock and hatching, along with the operation of broiler houses and primary processing.

CPF president and CEO Adirek Sripratak said that acquisition was considered to be an opportunity for the company’s expansion into Russia, that is expected to have significant growth potential for meat consumption.

The consolidated sale of both the entities last year, who hold around 5% of Russia’s poultry industry, was around RUR16.9bn ($28.5m), along with a net income of RUR5.1bn ($8.6m).

CPF said in a statement: "The immediate benefit that CPF will gain from the transaction is to have a strong footprint across the St Petersburg and Moscow regions.

"The excellent management, strong operational presence and consistent financial performance of the assets would offer an ideal platform for CPF to become one of the leading poultry players in Russia. The investment is in line with CPF’s strategic objectives to focus on its core businesses and further diversify its geographical presence internationally."

Severnaya and Woyskovitsy CEO Willeke van den Brink said: "After a highly successful two decades in the Russian poultry market, and growing a small family enterprise to one of the leading players in the industry in Russia, we feel that the company can realise its full potential and enter its next growth stage by being part of a large multi-national player with a long term vision."

The completion of the transaction is subject to antitrust approval in Russia and other conditions.

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Image: The consolidated sale of Russia’s Severnaya and Woyskovitsy was around RUB16.9bn ($28.5m) in 2014. Photo: courtesy of njaj/freedigitalphotos.net.