Russian President Vladimir Putin has signed a law that has set zero tax rates for agricultural producers on profits.
The Russian President signed the federal law on 3 October, "On Amendments to the Tax Code of the Russian Federation and the Annulment of Certain Provisions of Legislative Acts of the Russian Federation."
In response to the signing, Sergei Mikhailov the general director of Russia’s largest meat producer, Cherkizovo, sated that "Our company appreciates the decision to extend the zero rate of income tax for agricultural producers”.
“The reset of income tax will have a positive impact on our business and the industry as a whole, as it will allow manufacturers to increase long-term investment programs and increase competitiveness, which is critical since Russia joined the WTO. This decision will allow domestic agricultural companies to successfully implement new investment projects in the pork segment, where the payback period is higher."
The company is implementing a number of large-scale investment projects in its poultry and pork divisions. In its Poultry Division, “Cherkizovo” Group is implementing projects to double the capacity of the Bryansk and Penza clusters.
The Group’s largest investment project is the construction of an agriculture facility in Elets (Lipetsk region), worth more than 20 billion rubles. The agro-industrial complex will include a hatchery for 240 million eggs a year, five broiler sites for 10 million birds with a slaughter and poultry processing capacity of 24 tonnes per hour, and a modern complex to produce fodder with a capacity of 90 tonnes per hour. After the commissioning of the Elets complex, the total production capacity of “Cherkizovo” Group’s Poultry segment will exceed 500,000 tonnes in live weight. It is planned that the complex will reach full capacity by 2015 and the construction of the feed mill is currently underway.
Cherkizovo Group is the largest meat manufacturer in Russia, with 2011 revenues of circa $1.5 bn. It is also one of the top three companies serving Russia’s poultry, pork and meat processing markets.