A swine bomb for Blagoyar: Viktor Nauruzov buys ASF-infected sites, risking the reputation of the meat giant

A swine bomb for Blagoyar: Viktor Nauruzov buys ASF-infected sites, risking the reputation of the meat giant

The leading broiler meat producer, GAP "Resurs" (brand "Blagoyar"), is strengthening its position in other segments.

The group may acquire enterprises from the Kostroma-based company "Shuvalovo," which produce 10,000 tons of pork and 2,500 tons of sausages annually. Demand for sausages is growing, so analysts see potential for market consolidation.

The structure of GAP "Resurs" has received preliminary approval from the Federal Antimonopoly Service (FAS) to acquire the "Shuvalovo" group, which specializes in pork production and processing. It includes facilities for sausage and semi-finished product manufacturing, a dairy farm, and a feed mill in the Kostroma region.

According to a source in the market speaking to "Kommersant," the "Shuvalovo" enterprises can produce approximately 10,000 tons of live-weight pork, 2,500 tons of sausage products, and 10,000 tons of milk annually. The land bank, according to the source, amounts to 3,000 hectares.

In the 2022 report of "Shuvalovo," the company’s owners were named as Vladimir and Ninell Kominy. GAP "Resurs" is likely already preparing to take over asset management. A vacancy for a human resources specialist based in Shuvalovo, Kostroma region, appeared on GAP "Resurs’" profile on HeadHunter in February. GAP "Resurs" declined to comment, and "Shuvalovo" did not respond to "Kommersant."

GAP "Resurs," led by Viktor Nauruzov, ranked first in broiler meat production in 2023, producing 1.04 million tons in live weight, according to the National Union of Poultry Farmers. It also produces lamb, sausages, and other meat products, vegetable oils, and dairy products. Its brand portfolio includes "Blagoyar," "Dym Dymych," "Rossiyanka," and others.

A source from "Kommersant" estimated the potential value of the "Shuvalovo" business at 500 million rubles, based on the EBITDA of the group’s enterprises in the range of 150-200 million rubles in the last three years, net debt of 1–1.2 billion rubles, and the book value of fixed assets at 1.6 billion rubles.

The General Director of the National Union of Pork Producers, Yuri Kovalev, notes that "Shuvalovo" shows good productivity results. In 2022, one of "Shuvalovo" facilities was found to have an outbreak of African swine fever, according to the report. As Kovalev explains, production on such sites can be restored after certain procedures in modern complexes.

"Shuvalovo" may become GAP "Resurs"’s first asset in pig farming. In 2022, sources told "Kommersant" that GAP "Resurs" was close to acquiring the assets of pork producer GC "KoPitania." In the summer of that year, the FAS authorized GAP "Resurs" to acquire part of "KoPitania’s" assets. However, according to a "Kommersant" source, the deal has not yet been completed. "KoPitania" declined to comment.

In 2022, 2.4 million tons of sausages were consumed in Russia, according to the "Agroexport" report.

Albert Davleev, President of Agrifood Strategies, notes that GAP "Resurs" is striving for diversification of its product portfolio and is developing deep meat processing, which is why it is considering purchasing pig farming enterprises. These have synergy with poultry complexes due to the mutual exchange of feed resources, the expert points out. Alexey Kletzko, director of "Yakov and Partners," notes that the deal with "Shuvalovo" fits into GAP "Resurs"’s strategy of acquiring local meat processors and could help develop expertise in pig farming.

According to Davleev, meat producers may soon be primarily focused on the domestic market due to difficulties with exports, such as payment issues and logistics. According to NielsenIQ, meat and sausage sales in 2023 exceeded 2021 levels in absolute terms, with both categories seeing double-digit growth. However, a "Kommersant" source in the market notes that GAP "Resurs" may have expansion plans for exports, particularly to Southeast Asian countries.

In its M&A market research, Rosselkhozbank classifies meat processing as an industry with low consolidation, where the top ten players control 20% of the market, forecasting further asset acquisition deals among pig and poultry producers.