Sberbank of Russia has provided Cherkizovo Group the first tranche as part of the line of credit for the construction of a turkey meat production plant.
Tambov Turkey LLC, a joint Russian-Spanish venture created by Cherkizovo Group and Grupo Fuertes for the construction of a vertically integrated turkey meat production plant in the Tambov Region, attracted RUB 1.2 bln as part of the first tranche of the line of credit. Sberbank CIB organised financing, which was announced in February of this year.
The total investment in the project amounts to RUB 7.5 bln (including VAT), of which more than RUB 3 bln is a joint investment by Grupo Fuertes and Cherkizovo Group, the remainder is long-term loan financing.
Sergei Mikhailov, Cherkizovo Group CEO, commented: "Two years ago a unique international agribusiness investment project was launched: with the help of Sberbank of Russia and the Tambov Region Administration we were able to seamlessly combine the many years of international experience of our Spanish partners and Cherkizovo Group's experience in implementing major investment projects in Russia. We anticipated demand for a broader and more diverse range of poultry products and next year will begin providing consumers with high-quality locally produced turkey meat."
Dmitry Sredin, Senior Banker of the Client Management Department, managing director at Sberbank CIB, said: "We are delighted that thanks to the financial support from Sberbank, this major high-tech agricultural project is being carried out in Russia using a significant amount of foreign investment and the many years of experience of the Cherkizovo Group and its foreign partner. When preparing the lending deal the bank took into account the specifics of the client's business, its reliability, and also the project's scale and potential. This is why even in the current challenging market conditions, we are providing long-term financing for up to eight years and looking forward to extending cooperation with our partners. On the whole, Sberbank takes a rather flexible approach to its product offerings, which enables us to take into account specific financial needs of companies from various sectors of the economy."
Grupo Fuertes president Tomás Fuertes commented: "Grupo Fuertes is increasing its presence in international markets. In Russia, we have partnered with the country's leaders in finance and agriculture. We are building a company that will be efficient, competitive and environmentally friendly. We will have everything that is required to provide consumers a great product."
Currently Cherkizovo Group and Grupo Fuertes are constructing several major facilities, including an incubator with an output of 5.9 million eggs per year, a feed mill capable of producing 150,000 tonnes of fodder per year and housing 120,000 tonnes of grain, four rearing areas that have four units each, sanitary checkpoints, and modern warehouse complexes. The Tambov Turkey project will have an output of over 40,000 tonnes of turkey meat per year (dressed weight).